Well, according to the kid, the teacher asked for the toe licking, and offered candy as a reward. I that's true, the teacher is in the wrong, but in my opinion nowhere near deserving of termination. A reprimand should suffice.
However, I have my doubts it happened that way. From the tone of the teacher's yearbook comment, I'm more inclined to believe it was the boy who initiated the behavior not the teacher. In any case, unless she had athletes foot at the time, it was really a pretty harmless event. I hate it when parents over-react in this way.