Yes, some kids do have reactions from touching protein residue from foods (my DD is one) or from inhaling aerosolized food proteins (think severe asthma attack.)
The bigger concern is that kids could ingest protein residue that is on their hands by putting their fingers in their mouths, touching their food or utensils, rubbing their eyes or noses, etc. For some people, it doesn't take much to provoke a reaction.
As a mom of kids with anaphylactic food allergies, I appreciate a heads-up whenever there is going to be project involving food. Then I can prepare my kids to skip a certain thing, or provide a safe alternative.
Anyway, sorry for hijacking your thread

I just can't help it because when I see science experiments involving eggs (DS is allergic to them) it makes my hair stand on end!

Most likely none of your guests are allergic to milk, eggs or corn. If they were, they probably would have told you already that they are bringing their own cupcakes (that's what we do when we're invited to b-day parties.)