As we've been using the system ourselves recently I've been amazed at a number of things. Number one - we get way more money for food than we would normally budget. Our food stamps are easily twice what we would normally spend to feed our family. I suppose we could be considered to be somewhat frugal, but also the food stamp system is universal and doesn't vary based on cost of living, so here in the midwest where it's relatively cheap we get more food, effectively, than more expensive places.
Having also used WIC, there are some stark differences between the two programs - they really have different mandates. WIC is meant to provide a source of nutrition for children, and so they are allowed to specify foods that have high nutritional value. Food stamps aren't intended to provide specific nutritional value for growing children (and in fact if you qualify for one, you often qualify for the other if you have children and can get both benefits).
In chatting with my sister in law (getting her PHD in family sciences next year) she indicated that the gov't is in a bit of a bind legally. They can't tell people what to eat even if they are providing the funds to feed the people. Further, nutritious foods are more expensive in some ways - fresh meat, foods, and vegetables are healthier than their cheaper processed foods. So on top of being unable to tell people on the public dole how and what they can eat, they have to give them more money so that they can always get the fresh, non-processed food that may be more expensive in some areas.
The system is seriously screwed up, but it's designed this way due to all the various court rulings that have been made over the years about what the gov't can and can't do in providing food for people.
While I don't want to excuse this woman's actions, I found something interesting about my own situation:
While we couldn't afford to do the fun and nice things we wanted to, we could splurge on fun food we wouldn't normally buy. I specifically went to the store several times over the last year and a half and purchased just ice cream, toppings, etc so I could make a whole restaurant-style sundae bar for my kids. It's not exactly a trip to a theme park, but we had a blast doing that sort of thing. We couldn't afford to go to the movies, but my wife discovered General Mills had "specially marked boxes of cereal" where two boxes would give you a free movie ticket you could print out at home - nothing to send in. Over the next month or so she would scour the local stores for these boxes and we were able to take the kids to movies on their birthdays and so forth on food stamps - about 14 movie tickets total between last fall and this summer, so not a big deal, but it was using the food stamp system in a way it wasn't designed to do. Had to eat a lot more cheerios and cinnamon toast crunch than we were used to.
So I no longer begrudge people their treats when I see them using food stamps for stuff I would never normally buy.
I do feel there's a strong need for re-evaluation of the system. However there's no such thing as one-size-fits-all, and as many programs as I can think of, there's bound to be a group that suffers under it, and thus there's going to have to be a loophole, which others will slip through as well, and so forth. Right now it's pretty basic and simple.
A lot of people are taking advantage of it - but I don't know that there's a good solution that doesn't hurt more than it helps. Just last month the food stamp system in michigan changed - they now count certain assets, such as second homes and property, cars, and a few other things, in their calculations. So a number of rather well-off families who work the system will have a harder time keeping their benefits (what you do is create a corporation for the business you own, and pay yourself a very low salary, and then have the business cover your big expenses such as your car, travel, entertainment, healthcare, etc)
Coincidentally, my main client over the summer that wasn't paying me finally needed more work done, and of course had to pay up to date, so I won't be on food stamps very shortly. If my next few customers turn out to be better than my last few, we might actually be able to go on a trip next summer.
We'll have to give up the sundae bars, though - too expensive for a regular food budget...