I have mixed feelings on this too.
On one hand, I can see where they are coming from. The child not only can't eat them, but can't even be anywhere near them or someone who has recently eaten them, so the school wants to free itself of liability by banning them altogether. It's not just about the kid knowing what he can and can't eat. Sure, there's homeschooling, but that isn't a feasible option for everyone. And seriously, it's not hurting anyone to have to go 6 or 8 hours a day without any peanut products
On the other hand, the kid is going to have to figure something out eventually because in everyday life he's gonna encounter nuts and legumes and stuff. And it's true that the other kids aren't going to understand why they can't have PB&J for lunch and may resent allergy-boy because of it.
I don't know, maybe the bubble thing isn't such a bad idea after all.