it's very annoying when parents say no for no particular reason.
the local paper here also does a picture of all the new starters in all the reception classes - if you said no your dd might be the only child not in the picture - how do you think she would feel about that?
it also means that parents are not allowed to take pictures or video of the nativity play - so one parent's paranoya spoils it for everyone else.
It is quite a different matter obviously if the issue is a child protection one, but anything else is unreasonable imo.