I'd chalk it up to experience, and next time, send in a note with the donations about what your intentions are...picking up what's leftover, or "just send the leftovers home with Johnny."
I always assumed donations were just that.

And a donation to a teacher who had several classes would be shared.

Therefore, if I was sending something in and felt otherwise about what should be done with the leftovers, I'd assume it was up to me to let the teacher know.
It sounds to me like "decorating" cupcakes was supposed to be a simple project for 10 year olds, not a big production with "professional" supplies. Maybe the kids just really didn't know how to use the products, or there wasn't a lot of time allotted for the project. And I wouldn't trust a 10 yr old to have a good handle on how much was actually used. Not that I'm saying there's
lying...just what a disappointed child's perception is, and how aware he may or may not be of what's going on in the whole classroom.
It could be as simple as not having had the time to get everything together to send back to you yesterday. Or, the handled food issue. Or, the end of year is so crazy, she just forgot to send it back. Or not wanting to use "some pricey packages of gumpaste and edible decor from specialty stores".
If you really want to know what happened...why she didn't use the supplies, and to get them back...then call and get the story. But, I wouldn't feel defensive about it. Your son may have felt it sucked because
his stuff wasn't used; the other kids may have had a very good time with what they did do.
The instantly hostile responses towards the teacher on this thread are kind of

. At this point, we know nothing except what the child said.
Per a PP:
I know as a first grade teacher that the kids get really disappointed when they are told they are going to do something and the plans change. This seems like it was delibrate
What didn't they do that they were told they would?? What plan changed? And WHY did the teacher do this (whatever "this" is that she's being accused of)
deliberately??
Wow.