According to the article, the traditional school bake sale is "fast becoming obsolete" in California, where state regulations forbid selling snacks to students that don't meet certain nutritional guidelines regarding saturated fat, other fat, and sugar. Other states' school districts seem to be headed in the same direction Kentucky, for example, was listed as having especially tight school regulations.
Still, if you're planning your next bake sale, I wouldn't panic yet. For one thing, even the school group featured in the article managed to do an end-run around the rules by holding their bake sale across the street from the school. The taste for sweets will probably never go away.
For another, the great thing about food is that it's endlessly versatile. Let's take the sweet issue: I held a bake sale recently (yes, in California), where I asked someone to bring cheese bread as an alternative to all the sugar. It turned out to be a popular item. Even sweet treats can be created using bananas, fruit juice, honey, maple syrup, or agave nectar in place of the sugar -- all you have to do is check the right cookbooks or websites (try ones dedicated to people with allergies or diabetes). Or if that sounds like too much work, how about creating baggies of trail mix, including colorful additions like dried cranberries?
Also, as someone with food allergies, I can guarantee you'll have more customers if you put a sign next to each baked good explaining what's in it. Delicious baked items can be made without many of the common allergens including eggs, dairy, wheat or other gluten-containing flours, and peanuts as well as other nuts. If you really want to make an effort on this one, it's easiest to start by finding a volunteer who's experienced in baking for people with allergies.
With steps like these, you'll not only bring in profits, but feel good about what you're doing -- providing nutritious, home-baked foods in a world of junk calories.