I think what irritates me the most is that our school actually asks what name the child prefers, and then this information is ignored.
When dd2's teacher (the head, actually) started calling her by a shortened version (which had NEVER been used for her before), she was only 6. And shy. She found it impossible to correct her headteacher, and so allowed it to continue.
Others then took their cue from this, and it snowballed. At no point did dd2 ever get a choice.
I would feel differently about it if it had arisen from her friendship group - she would have been more involved, and more able to say something if she didn't like it. In fact, her group have flirted with various different shortening/nicknames for a few, but none have really stuck - they all go back to their full names. EXcept with dd2, as hers has been going on longer, and some teachers now use it too, which makes it more 'official'.
It's wrong - if I worked with an Elisabeth, I couldn't just decide to call her Liz, or Betty, or Beth, or any of the other variants. Similarly, I couldn't decide a Christopher was a Topher, or a Chris. It's not my choice to make. And incredibly rude to ignore someone else's wishes and choice in the matter. Same goes for teachers (more so, imo, due to the power imbalance) as I said above, dd2 found it impossible to 'correct' her headteacher, so had no choice in the matter. She has grown to 'not really mind' but it bothered her a lot initially. So now she is known by a name she had no choice over, whilst others in her school are allowed their full name/choice of name (there isn't particularly a culture of shortening/using nicknames, generally what the child prefers is what is used)