When a manager is intimidated by his/her direct reports, they often focus on trivial and insignificant issues. It allows them to boost their egos while exerting their dominance over you without actually making the wrong decision on things that are actually important. And, unless you work for the military, there is a very heavy line drawn between what a manager can and can't tell you to do if it isn't already in your employee handbook. A vegetarian boss couldn't make all his/her employees eat only vegetables at work, the same can be applied to music. Particularly in this case where you've got a tradition of acceptance and so long as it doesn't interfere with anyone's work.
You could also throw a passive strike and have everyone call in sick during crunch/deadline time. But that would require a solidarity that most IT folks don't share (unfortunately, as an IT union would rule the world, literally, in about 24 hours).