I think it, like with many things, is a case of a lack of options. A one-company monopoly is sort of an invention - even if 3 companies dominate an industry, they act the same as a monopoly.
Part of the issue on the government's end is a failure to plan for the imagination of the food producers and school districts.
Gov't: your main entree must have X-calories, including y% carbs and z% of protein, but must not exceed 2y% fat (thinking they'll serve students traditional main course options)
.
Food producing corporation (and here's why I place the blame here, amongst a multi-problem issue): choose one of these:
a - bagged pair of cheeseburger sliders (including garbage meat 51% actual meat) (legal, as per the gov't requirements)
b - bagged pretzel w/ cheese dip (legal, as per the gov't requirements)
c - (which I doubt is even a thing, because of $$$) a lovely, freshly-made enchilada
.
School district: uhhhh, well, we can only afford a or b........we ordered a last year and many students didn't eat it, so let's go with b.
The school system had tons of money - but the "piles of money" are all segmented. I think a differentiation of money for the actual food separated from the food service costs/salaries, etc. would be a good idea.