i grew up in a very small out of town community where there were no kosher pizza shops or any hang outs on motzei shabbos and where saying good shabbos or hello to a boy wasnt the end of the world. my school was co ed till 8th grade. most of the boys in my class came from yeshivish homes. i had rabbonims sons and the rosh yeshivas grandson in my class becuase there was no choice and no money to fund a second school. we were all friendly with each other and everyone stayed yeshivish and married good frum people. my best friends were these twin boys who lived down the block from me.
personally i think if the kids are going to hang out anyway let the pizza shops stay open. its a public place where anyone and everyone can see them. closing them would cause way worse havoc. where else will the kids go? the library? doubtful. they will find some other place. perhaps less public or less frum jews. either way, less eyes on them. kicking a kick out of yeshiva or bais yaakov is the worst thing someone can do. theres no coming back from that. whether emotionally or even in terms of shidduchim. the kids will even hang out more if they dont have to be in school. let the parents dicipline these kids. schools should stay out of it. anyways thats my opinion.