I am outraged by this.
Actually, the person doing the bullying here is the coach. There are 41 boys on this team, and of those a couple "maybe" had engaged in making anonymous comments online about another kid. And contrary to popular opinion, the average athlete is no more a bully than any other average kid.
So, the response of this "coach" is to punish everyone for something that most and possible all of them had nothing to do with. Way to go coach.
Now, to carry on playing these kids have to humiliate themselves and be publicly branded as sociopaths, all in the name of building "character". That is the exact same language that people defending bullying use, so how is this any different? Does he not see the irony in what he is doing or does he simply not get it?
If someone does something wrong, punish them, and if you can't prove it, do NOT go rounding up all their neighbors and punishing them instead. That is just immoral.
As to what message these kids are getting, I can't speak for them, but personally, when I was a kid, we occasionally had teachers and what not "build character" by punishing everyone when they couldn't figure out who the guilty were. The usual result was to create significant bitterness and general contempt for authority among the student body. Naturally this was not expressed openly for fear of provoking official retribution, but it was always the consequence.
No doubt most of these kids will jump through whatever hoops he wants them to jump through since they just want to play football, but if he thinks he is somehow "building character" he is sadly delusional, it will have quite the opposite effect. He is creating anger and resentment in kids where those emotions might not have existed before. Personally, if I had been on that team, I would have refused to continue playing and let him coach an empty field.
If he really wanted to build character in his team the way to do would be to have a component of social involvement as a requirement for participation in the team, and not to link it to specific anti-social activities as a form of indiscriminate punishment.