Given that kids tend to look at the candy they got as their leaving the house, it won't be long before people know which house it is. What gets me is that she's not giving out the letters to all kids, just the ones *she* deems are "moderately obese". I assume this means she'll be giving out candy to kids that do measure up to her weight status. Remember how you felt watching the Charlie Brown Halloween special when every house gave him a rock? They aren't rocks here, and they aren't cartoons. They are real live children who have feelings and are well aware of how they measure up to their peers. They don't need some busybody telling them they're fat but their friends are acceptable.
It's cruel for sure...and unless you're ready for the backlash that she's likely to receive from this, then it's best left alone. I know I wouldn't be very neighborly with someone who did something like this...just a freaking busy body with nothing better to do but criticize and bully children.
She reminds me of the neighbor we had at our last house ... and she was clueless as to how people felt about her as a result of her actions. She could alienate a person within a couple of minutes of meeting them. She thought she was being "helpful" too.
Karma...this will come back to haunt her (no pun intended), but I find this is true most of the time.