I don't think anyone will claim that all chicken nuggets are made this way, but you can't be sure when you're eating out. Read the labels of what you're bringing into your home and ask questions at restaurants. Look for the term "mechanically separated" and stay far away from it! (Or better yet, don't serve processed chicken nuggets at all!)
The saddest part is that the kids still wanted to eat them. Our society is doing a horrible job of teaching children what real food is and how food effects our body, positively and negatively.