@mesquite,
I remember a one time distribution of large blocks of cheese to low income people. But the only one I'm familiar with was a time in Baltimore and the cheese (if I remember correctly) was surplus cheese that was reaching an expiration date and it would have otherwise spoiled. I suppose there could have been others, but I don't remember that it was all that much of a bonanza for folks. But by giving away the old surplus cheese, it freed up storage space and saved some money used to rent or maintain storage.
I did see the other definitions of 'cheese-eater', it just doesn't seem as if it has all that much punch, it's more like something you might hear in a 1945 B movie. Also, it's more amusing than offensive, like when a 4 year old calls someone a do do head. I just don't feel the offense it's supposed to engender. But, what the heck, if a few members get pleasure because they think they have found a new naughty word or phrase, I'm happy for them. It's starting to make me chuckle, and I always appreciate a chuckle (el al)
CORRECTION: I just read your link and didn't realize how it is being managed now. I only remembered the program in the late 70's in Baltimore. At least that's when I think it occurred.