I think you're looking at this as simply LGBT rights versus religious rights, which is not quite the issue.

Certainly LSUC did not want to endorse discrimination  -- and there is no doubt that the TWU's covenant discriminates cruelly against LGBT students.  But the LSUC is more broadly concerned about the role of law societies to maintain a secular profession in the public interest, which includes overseeing legal education.  As such, the Ontario courts accepted LSUC's longstanding principle that the only criteria for law school admission should be merit, and that it was within the rights and traditions of LSUC to refuse to accredit a law school that would require religious adherence as an additional entry criteria.  To do otherwise would create a degree of unfairness.

As for balancing rights, the LSUC's decision doesn't prevent evangelicals from practicing their faith, going to law school, or becoming members of the Ontario bar.  Nor does it prevent TWU from running a law school.