If the letter that one mom received back from Scholastic reads right, the situation is as I figured and the reason they EXCLUDED Home Schools is because of the $5,000 Athletic Equipment for the Winning Child's school.
The thing is they could have put a request asking a Homeschooled child to donate it to any place where they take classes, or the local school or even a local charity that was in need.
It doesn't make it any better though... to blatantly exclude "Home Schools" is no different than putting a sign in the window saying "Blacks need not apply." Or "Irish Need not apply." The apology was nice enough but it doesn't make me feel any better.