I think your first reaction about having the whole school change it's policy because of a few students is quite normal. I never even knew this issue existed until a few years ago. I cannot remember where we were flying to, but instead of peanuts on the flight they had bagel chips or something. Whatever it was, it wasn't something I liked (I too am a very picky eater), I was hungry and had not thought to pack a snack because it was a short trip and I do like peanuts.

I was quite annoyed at the time. I did not realize how allergic some people are to peanuts, not just eating them but through skin contact and inhaulation as well. I saw a show on the Discovery channel about it and I cannot imagine how scarey it must be to have your life or the life of your child depend on complete strangers that may be ignorant of the dangers (I certainly was). There's more information out there now, use of peanuts or their products are posted. Until rather recently, they were sitting ducks.