Hale, a Methodist who taught at the school for 19 years, was dismissed in March after she included the name of her female domestic partner, Julie, among the survivors in her mother's newspaper obituary.
The diocese terminated Hale's contract soon afterward. Campbell said in a Columbus Dispatch interview that Hale was fired not because she is gay, but because her "quasi-spousal relationship" violates church teachings, her contract and diocesan policy, the latter which prohibits immoral behavior and requires employees to follow general church tenets.
Her decision to include her partner in the obituary made the relationship public, the bishop said.
Campbell told Dispatch reporter JoAnne Viviano he had to dismiss Hale because he has a "fundamental responsibility" to maintain the Catholic identity of institutions under his supervision.
As of Monday morning, more than 120,000 people have signed a Change.org petition in support of Hale.
More than 660 people signed another petition siding with Campbell as of Monday.
Two of Hale's former students -- Amanda Finelli, class of 2005, and Mike Liggett, class of 2010 -- organized the Friday protest.
"We're showing the diocese that we are not going to go away," said Finelli, who penned an article about the situation for The Guardian newspaper in London.
"How does firing a teacher over who she loves teach teenagers to successfully negotiate their sexuality and, furthermore, their identity?" Finelli asks in her Guardian article. "... We can't tell LGBT teens 'it gets better' if there aren't adults willing to make it better."
Finelli set up a Facebook group, Halestormohio, and the hashtag #HalestormOhio on Twitter to mobilize support for her former teacher.
Liggett said Hale is a person "who treated students with fairness and respect. She always remembered us outside the classroom environment."
The protest drew other Watterson alumni as well as members of the local Call to Action and DignityUSA groups. Members of the hacker group Anonymous also showed up in Guy Fawkes masks.
Hale's supporters rallied for three hours, carrying signs proclaiming, "A Compassionate Church?" "Who Is Next?" and "Love Is Love."
As they lined up on both sides of the street in front of the diocesan building, the protesters chanted, "Who would Jesus hire?", "Who would Jesus fire?" and "Campbell's in the soup."
They urged passing cars to honk in support of Hale.
Many did.
Charleigh O'Brien, a 2009 Watterson graduate, said she first met Hale when she attended a summer gym class prior to her freshman year.
"She was so welcoming. I was really excited to be going to Watterson," O'Brien said. "She really embraced all of her students. You always felt comfortable around her."
A former diocesan teacher and member of Call to Action asked why the church would fire Hale and tolerate pedophile priests.
"Why is nothing said about divorced and remarried Catholic teachers, or those who are living in sin, outside marriage, or people who are using birth control?" the woman, who asked not to be identified, said. "You need to go after all of them instead of singling out one case."
Joe Gentilini, a member of DignityUSA, said the Columbus diocese's action was unjust and arbitrary and jumped to conclusions about Hale's private life.
"The church's position states that it is not immoral to be homosexual, but that sexual acts are," he said. "So how did they know? Did they ask her?"
Hale said she will not back down in her resolve to return to Watterson. She has filed complaints with her local teachers union and the city of Columbus' Community Relations Commission, saying her firing was discriminatory.
Commissioners could decide within a few months whether the diocese violated the city's ordinances that protects employees from discriminatory treatment for a range of reasons, including sexual orientation, according to a Sunday Dispatch story.