Most industrially baked breads contain sugar. Typically 2-5g per slice. I haven't really had industrial bread without sugar, but it doesn't surprise me that the sugar is required for taste. "Good" bread has long ferment periods that gives the bread a lot of time to develop flavor. It's probably much faster to cut the long ferment periods and use sugar for flavor instead.

It's a trade-off between food that's entirely healthy and food the majority of kids (who are not accustomed to a healthy diet) will actually eat. There's a huge amount of food waste in schools. If you don't have kids in US public schools, just know it's pretty common for kids to get a full school lunch just to eat the fries or drink the milk/juice, and discard the rest. Similarly for school breakfasts with things like frosted flakes. Absolutely not healthy, but if the alternative is not eating at all, it's understandable that administrators feel obligated to compromise.