Should university administrators share official matters with students?
I think a department should share information with students that can affect them. A non-hire of faculty doesn't affect students directly unless the students were recruited to the department with the promise of expanding in a certain area, and then this fell through. 

But I don't know of a single department that would make such a promise to incoming students (and certainly not undergraduates). 

On the other hand, if the department experiences a shortfall in funding that means that they have to change how they fund students, then these students must be informed as soon as possible since this materially affects them. 

Apart from these cases, one can certainly make the argument that sharing relevant information with students helps foster an atmosphere of collegiality and gives the students a sense of belonging. Within reason...