This is a basic constitutional issue. As uniformed representatives of the school the cheerleaders represent the government. By holding a sign with religious quotations at a public school football game they are endorsing religion. This violates the Establishment Clause of the 1st Amendment.
A student should be free to attend a public school football game without being presented by quotes from the Bible from agents of the school. If you were to allow the cheerleaders to have signs quoting from the Bible you'd have to allow quotes from the Quran, or any other religious book, as well. Anyone is free in the stands to hold any signs they want. But when it is done by agents of the school as part of a school-operated event, it becomes a government endorsement of religion which isn't allowed.