I had something similar happen in high school as well - same era of computing technology, but my "crime" was using the Back Orifice client on a terminal in CAD class and discovering that a good chunk of the school's network had been infected with it. Attempting to convince the district's administrator that a problem existed at all got me a "we have antivirus, we're fine" response (their solution for everything was the same as yours - reformat and reinstall), and when I pressed the issue with the school's administration I was given a more detailed answer of "fixing it isn't in the budget."
So I forced the issue, by using the client to display popup messages on several terminals in my Internet Publishing class, with the teacher in full view of what was going on. Got pulled aside and "reported" to the administration, and he made all kinds of noise about "port scans are a felony" which I couldn't help but laugh at, considering he ultimately had to use the BO client himself to remove the infection. The school administration wanted to expel me and sweep the problem under the rug, but they basically had to settle for assigning me one session of Saturday School after discovering that I had never signed the liability waiver the district required of every student prior to using their computers (I was handed one, I stuck it in my backpack and promptly forgot about it), and neither my CAD teacher nor my Internet Publishing teacher bothered to enforce collecting the damn things.
The start of the second semester that year was telling, because the school had its campus police lock every computer lab and basically force every student, for each class period, to sign a liability waiver and return it before they'd let anyone in.
Story doesn't end there though - fast forward a year and change, over the summer the school spent a huge amount of money having one of the computer graphics classes upgraded, with something on the order of 20-some iMacs and 4 G3's. Barely a semester later, somebody broke into the lab, ripped most of the memory out of each machine, and reconfigured the virtual memory settings so that the theft wouldn't be noticed immediately. And it wasn't. Take a wild guess who their first suspect was.
Getting pulled out of class by two uniformed police officers was fun, though nothing came of that, or their investigation, as far as I know. The school didn't get reimbursed by their insurance company either, because the computers had anti-theft locks installed but none of them were actually armed.