It is literally the definition of discrimination. Ahem...
Discrimination- noun- treatment or consideration of, or making a distinction in favor of or against, a person or thing based on the group, class, or category to which that person or thing belongs rather than on individual merit.
Where you are correct is that it is not discrimination based on the Civil Rights Act of 1964, which is what matters for federal purposes. No one here is insinuating that the type of discrimination that DOs face is equivalent to that faced by people experiencing racial or religious persecution, but it is a type of discrimination. It is totally reasonable for DOs to expect that the practice end if they're to turn over thousands of formerly protected residency positions. I'm not saying it should be a sticking point, but it's a point for negotiation. With that said, I'll go a step further and say that similar protections should be afforded to qualified MD students who apply to osteopathically-focused residency positions.
No one is saying that PDs can't judge DO students based on the perceived or real quality of the schools they attend, or grades, or Step scores. That's part of normal selection. What sets DOs apart is that they are part of a large class of people who share a single, uniting feature: their degree. I think what people are saying is that, all things aside, it should be against official policy to immediately discount an entire human being (and their potential value as a physician) because of the degree behind their name. With the status quo, I don't get too upset about it because of the clearly conflicting issues among both parties, but under a merger being negotiated in good faith, it is reasonable for the osteopathic profession to call for an end to the practice.