I dunno...Greek mythology ? Much less chance of offense if it isn't a current (and contentious) religion.
At any rate, especially in a school, some literature has to be "off limits" for pragmatic purposes. I'm pretty sure that a teacher telling students to read Mein Kampf *purely for historical significance* or the Marquis de Sade *purely for biographical insight* still won't go down too well with most parents. Heck, some parents are trying to ban Harry Potter (which I don't agree with, BTW).
But since there's already an "unwritten" rule that some lit is not appropriate in a school, I think it stands to reason to include that restriction to works of faith. Surely you know of the contention that surrounds these things, with many people clamouring for the abolition of evolutionary teaching in favor of creationist tripe, etc. etc. ? I just think it makes good sense to steer clear of unnecessary controversy.
As an atheist, if I sent my son to a secular school and his Christian teacher asked him to study the Bible, I would be miffed. I'm not saying that I actually would mind my son reading the Bible, I just don't think school is an appropriate place to learn mythology. I might well let him read the Bible at home (after instructing him on the historical and cultural context), along with the other major religious texts and ancient mythology, but it would be on my terms and on our personal time.
Of course, if it's a Christian school, I see no problem with this sort of thing, since the parents and children should know exactly what they're getting into.