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Description of problem:

Like bug 1255030 and bug 1254698, xinetd cannot read /etc it seems:

type=SYSCALL msg=audit(08/19/2015 15:30:11.596:924) : arch=x86_64 syscall=open success=no exit=-13(Permission denied) a0=0x7f57c3e5dab2 a1=O_RDONLY|O_CLOEXEC a2=0x1 a3=0x7f57c40543a8 items=0 ppid=1055 pid=3147 auid=unset uid=root gid=root euid=root suid=root fsuid=root egid=root sgid=root fsgid=root tty=(none) ses=unset comm=xinetd exe=/usr/sbin/xinetd subj=system_u:system_r:inetd_t:s0-s15:c0.c1023 key=(null) 
type=AVC msg=audit(08/19/2015 15:30:11.596:924) : avc:  denied  { search } for  pid=3147 comm=xinetd name=etc dev="dm-0" ino=133 scontext=system_u:system_r:inetd_t:s0-s15:c0.c1023 tcontext=system_u:object_r:etc_t:s15:c0.c1023 tclass=dir 


Version-Release number of selected component (if applicable):
selinux-policy-3.13.1-42.el7

How reproducible:
always

Steps to Reproduce:
1. set up a simple service in /etc/xinetd.d (see examples there)
2. try to invoke it using ie. netcat
3. get connection reset, observe AVCs

Created attachment 1064868 [details]
avc log, in enforcing (connection reset)

Created attachment 1064869 [details]
avc log, in permissive (server binary executed)

Note that there are no AVCs related to xinetd, the only visible one is from the actual command executed by xinetd.

The issue was incorrect /etc context,

restorecon reset /etc context system_u:object_r:etc_t:s15:c0.c1023->system_u:object_r:etc_t:s0

and while it's still unclear what gave it c0.c1023 (SystemHigh) instead of s0 (SystemLow), the issues reported in comment #0 are a result/symptom of this change, not its cause.