Technically, according to the USDA, the school is required to provide safe food for a child with a 504 for a LTFA (I can get you a link). However, we've not ever had the school do this. It just wasn't in our comfort zone. However, there are families here who have situations where their children do eat at school (the parents have gone in and read labels and do so regularly, they have a comfort level with the school handling food, etc.).
My son is in high school (a freshman), and having seen the way the school handles food--they have allergy warnings on all food out so students can see), I am planning to talk with teh cafeteria director about DS eating there. We do eat at some restaurants and it's essentially similar.
But that's different than food in the classroom.
When my son was in elem school and they were allowed to eat in the classroom and kids brought PB, we took oru child home.
This was a violation of FAPE. He did not have the same access to education that his nondisabled peers had.
It was also a matter of inclusion. He was being excluded from educational and social opportunities that his nondisabled peers had.
He was also excluded when they made him go out in the hallway when mothers brought SURPRISE! cupcakes for the whole class. Ugh.
We have also not let others make decisions about what is safe and what is not safe. I understand why that is angering you.
I do think you should be able to get an egg-free classroom, especially given that this activity has caused reactions.
I would make a list of what your child needs in the 504 that isn't already there and work on that. At the same time, you probably have reason to file with OCR. However, that can be a long road. I might try resolving things internally first or at the same time.