An 8 year and a 16 year old don't regularly "mess around" the imbalance between the two both physically and mentally squares all fault on the 16 year old. A bus driver is not qualified to assign fault
The bus driver is also busy driving the bus, so its not like they would see everything that is going on. I'd assume no charges were filed because they didn't think they could win the case in court. The limited testimony from the bus driver, plus a plausible lie that the older kid told might be enough reasonable doubt that the they couldn't get a conviction. Would you want your 8 year old son to have to testify in court? Would the other parents of kids want their kids to testify in court?
I don't know what I would do. I definitely wouldn't sue the bus driver, unless I really felt that the bus driver was negligent or lying completely. I might sue the school, but I'd feel a little bad there knowing that our public schools (at least in Iowa) are underfunded. But not having a working camera on the bus is a problem. Honestly, if the medical bills were causing a hardship on my family, I might go the route of suing the school. If it wasn't a huge financial burden for my family, I probably wouldn't sue but I'd probably start to raise a stink about things at school board meetings and meetings with the school admins until I saw a change.
Someone brought up the media side of it and that might not be a bad idea. Even just to shed light on the issue like that, it might prompt other schools to ensure their cameras were working or provide more supervision on busses and prevent issues like that in the future.
Does your school have another adult ride the bus? That'd probably be a good policy, although being underfunded, I don't know how schools would hire people for that. Same with bus drivers, some larger schools have had to shift school start times for different ages because they don't have enough bus drivers and their drivers have to drive 2 separate routes.
If it were my kid and if the 16 year old still rode the bus, I'd be taking my kid to school directly, though. Luckily we'd have the flexibility to do that, but thats not true for everyone.