So I think you are overreacting a tad here ;-) Also keep in mind this isn't exclusively a government thing. We have meeting were parents were the pre-school comes with suggestions and parents come with suggestions as well and people agree together on common rules.
"And talk about taking the fun out of any celebrations."
You can't have fun if there aren't sweets? That is sad? In a school there are lots of kids. If you celebrate with sweets for every single birthday through the year, and then in addition have your celebrations at home with sweets that ends up being a LOT of sugar.
I think you are trivializing the problem with sugar. Kids don't NEED processed sugar. There are lots of other things they can enjoy such as fruits, smoothies, yogurts and other good food.