As usual with these E releases, the story is bias and exaggerated.
One parent complained about a routine cooking incident.

The Santa Fe New Mexican offers a more balanced story: http://www.santafenewmexican.com/news/67214.html
Kid Nation

On site were paramedics, a pediatrician, an animal safety expert, a child psychologist and others.
Santa Fe County Sheriff Greg Solano's office investigated Miles complaint and found "no prosecutable evidence of neglect or abuse." The kid who mistakenly put bleach in a soda drink recognized his mistake when he tasted it; no damage done and no stink raised.

Most of the kids enjoyed it, and earned a nice piece of change to boot.
Personally, except for the filming, it sounds like many of the summer camps all over the country; probably under much better supervision.

If one clicks on the link at the end of the story, some 33 comments from New Mexican readers are found.