The moral, or lesson of this story is about the importance of striking a balance in life, of aiming for moderation - which the main character, Michael Obie, emphatically does not do. The moral of the story is shown in his downfall.
Obie, an idealistic, enthusiastic young headmaster, allows his idealism to run away with him. He has grand visions of making his school a modern, exemplary, progressive institution and he does not have time for anything that he thinks runs counter to his vision. This arrogant attitude leads him into conflict with the villagers whom he regards as backward and superstitious, and he looks down on them instead of properly listening to them and trying to work with them. The priest who comes to see him points out the importance of toleration:
What I always say is: let the hawk perch and let the eagle perch.
In other words, people should allow different ways and customs to exist side by side - which Obie is not prepared to do. He does not want to let the villagers use a path that is sacred to their beliefs, as it cuts across the new school grounds that he has designed. The villagers, rebuffed, take their revenge by destroying the grounds. In the face of this open conflict, Obie's superior dismisses him from his job for his 'misguided zeal' which has led to such problems in the local community.
Obie, then, is punished for his hubris, his 'misguided zeal'. There was nothing wrong with him wanting to improve his school, but he should have tried to co-operate with those whose views differed from his own, instead of forcefully implementing his own ideas over and above everyone else's.