"Pilot in Command" is a specific, aviation term. When you are a student pilot, you customarily sit in the left seat, but the instructor is the PIC. He/She is responsible for the safe operation of the aircraft at all times -- not the person in a specific seat. This happens thousands of times each day all over the country/world, and nobody dies. It doesn't matter who is in which seat. In a Cessna 177, it is as easy to fly from the left as it is from the right seat. When two pilots fly in a small plane like a C177, they are always specific and clear bout who is the pilot in command. Even more than a ship at sea, the pilot in command of an airplane is the only person on the planet who has the final word -legally - on the operation of that aircraft. Even the President of the United States cannot overrule the pilot of Air Force 1. The PIC is in charge -- no exceptions -- and he/she makes all decisions as to the safe operation of their aircraft.
Apart from the over-indulgent and/or publicity whore parent, the sole responsibility for that accident is squarely on the shoulders of the instructor. This jackass planning a VFR flight into deteriorating, IFR conditions shows a fundamental lack of knowledge, care, and professionalism on the part of the instructor. I'm sure he ws thinking "aaah, let's just go up and see how it is." Taking two passengers into deteriorating, VFR conditions unnecessarily in pursuit of some minor 15 minutes of very limited fame is inexcusable. They were taking off at over 6,000 feet -- a whole different kind of flying than at sea level on the coasts. Just the forecast of increasing winds and (are you fucking kidding me?) thunderstorms in the area should have kept them on the ground -- any student pilot with 10 hours flying time could make that decision. Flying near thunderclouds is no joke. Doing so when you are flying a C177 in the mountains and your take-off altitude is over 6,000 feet is suicide -- and murder.