Not defending what was done here (there's no defense), but FWIW, cremated remains (cremains) aren't considered human remains anymore (legally speaking). That's why you can scatter them, keep them in your home, basically handle them however you feel is appropriate. So there's no abuse of corpse violations here.
Morally and ethically speaking, of course, is a completely different story. This boggles the mind. It reminds me of the movie Taking Chance and how they praised the work that is done at Dover (Which, to be fair, is probably the case with 99% of what goes on there, its done well and dignified). How can a place that is supposed to take such pride in honoring our war dead, allow something like this to happen.