The situation you describe is actually pretty industry standard; I've worked in a few schools where there are CCTVs in each classroom. Initially I found it to be somewhat alarming like yourself (thinking it was kind of like something one would read in Orwell's '1984'), but you get totally used to it.
The reasoning behind using them varies from "Parents like them," to "This is what all of our schools use." I wouldn't pass up on a good job for the sake of being camera shy, so to speak. However, if I completely had my way I'd like to see these devices removed from classrooms.