First its one night out of a year, the kids aren't going to forgot all their good eating habits because they participated in a pie eating contest, an American past time. If you're really worried about it, throw in the 500 dash or other outside excersises. However, we are using Redi-whip and putting it on paper plates.
I agree with having the teachers (or parents) be the contestants. With the kids eating, I see a lot of tummy aches (possible puking) and ticked off parents in your future. And really, how much pie can their young stomaches hold?
It might be more fun, and more likely to not cause issues, to have the teachers compete. The kids would still love it and it would still make for a great spectator event.
We had briefly discussed something along those lines but ended up scrapping it due to "healthier" eating recommendations being promoted at the school. Even if we made healthy items to eat, encouraging the kids to snarffle the food down in record time seemed to go against the policy!
Good luck though if you do it... I'm sure the kid's would enjoy it!