@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.