I think YABU.
We wrote our own obituaries in Year 5/6 (joys of a Catholic primary school!) and drew our own gravestones for a graveyard display on the classroom wall. I was about to say there were no issues but I've just realised that at the time a pupil's Dad was terminally ill! As far as I know there were no complaints from parents, or pupils, as the display stayed up for months.
It sounds like a really imaginative piece of work. I used to love doing things like this at school, as I found it really interesting to try and get into someone else's mindset.
Presumably with exercises like this the teacher would be extra careful, and would not have done it if the school were aware of any pupils with terminally ill family members.
The boy's behaviour sounds odd and inappropriate really. Why on earth would he just hand it to his Mum without saying anything?! It seems to me that maybe he had used the opportunity to express himself either as a cry for help, or because he was too shy/embarrassed/"macho" to tell his family how he felt, or perhaps he was just trying to wind her up. I think she is very wrong to have taken it to the press either way.
And she is being very melodramatic, it seems unlikely that in the time it took her to read the note he would have got upstairs and successfully hanged himself!