In terms of legal/illegal, yes, of course...matter of fact, as a citizen, if I see anything illegal/abusive/etc, I think I have the duty to report such.
As far as the school having a say in what the child eats at school...no, I do not. I don't know what food a child could eat that would cause disruption or impair a learning environment, but if that were the case, then yes, in the same way it controls disruptive behavior. Thats comparing apples to oranges in this context, though. At that point, it is effecting other students.