Depends on where they are teaching.  If they are teaching in a Christian school, and the understanding of the parents and administration is that the teachers take a tradidional historico/grammatical approach to the bible, the teacher is probably breaking their contract by teaching this.

Otherwise, if the school and parents don't care, and it's not part of the school's rules for the curriculum, I suppose that it just doesn't matter.  

The fairy tale / legend approach is just one of about five different approaches to the scriptures, but which approach a teacher is allowed or not allowed to take really depends on the school.  If you are a biblical liberal, you probably like this approach.  If you are a conservative, you probably think this approach is intellectually sloppy, if not incorrect, and probably shows an anti-Christian bias.