Normally I have to preface my posts with "I am not a XXXX, but". However, in this case, I actually am a molecular biologist deeply involved in the synthetic biology community. Here are a few thoughts:
First, the amount of ignorance regarding genetic engineering and it's facets (such as GMO food) is astounding. Anecdotally, I've heard that a significant fraction of British folks polled said they would prefer DNA-free food. (Think about it until you realize the ridiculousness). People typically imagine we are trying to create hybrid organisms or bizarre clone armies or something, when it reality, it's just mixing DNA that encodes for a series of proteins you would find useful in combination. To make glow in the dark yogurt that responds to melamine would be fairly simple if you had the right set of genes: a melamine sensor that, when bound to melamine, binds to a specific DNA sequence (a promoter) that drives expression of a fluorescent protein such as green fluorescent protein ("GFP", a widely used fluorescent marker derived from a jellyfish). It's not difficult, and it's not unsafe. The vast majority of DNA and proteins are degraded rapidly in your stomache, so they are safe to eat (toxins, parasites, and infectious agents excluded).
Second, people underestimate how difficult it is to accomplish something genetically. Yes, the circuit logic above is fairly simple. Unlike electrical circuits, though, where you can control electron flow with wires there is no such spatial regulation of biological parts. It's very stochastic. One has to tune the concentrations such that the melamine sensor will strongly bind to DNA at the concentrations of melamine likely to be in food, without prematurely activating and freaking people out, while also avoiding being sued because it didn't activate when it should have and someone died. Once you get the sensor right, you have to then tune the promoter so that you get expression of GFP the same way-- no leaky expression causing permanently green yogurt, but enough expression when activated such that you can see it. I can build a simple circuit to drive GFP in the presence of melamine, but getting it commercially relevant is extremely difficult.
Finally, and most importantly, the regulations of these types of technologies are, well, 2 steps from insane. There are no regulations on the transport of DNA encoding some severe toxin, to list one example. Take botulism toxin: the DNA encoding it is well known, and short enough that one could order it directly from a DNA synthesis company. From there you can use PCR to make as many copies of it as you need. Then, put it in your bacterium of choice, produce a whole bunch, and purify it out. That entire process could be done with someone with basic college level biology and about $5k. Anybody can find the botulism toxin DNA on, say, NBCI (run by the NIH) and get to work. And there are NO regulations on any of the steps required to produce it. A person with practical experience could do it much faster. I could produce enough to kill my entire university, starting from scratch, in about 2 weeks, give or take, maybe faster
A second example is the definition of 'natural' when it comes to food. Any chemical produced in a flask, chemically, is considered artificial, even if it's molecularly identical to the natural flavor molecule. On the other hand, any synthetic flavor produced by bacteria in a vat is considered natural, as long as the sugar used to feed the bacteria is also natural. The food industry is spending billions trying to engineer bacteria to produce flavors in large quantities, because the average person will think 'all natural' means healthier or better for me.
A third example involves regulation of the types of bacteria used to produce flavors: if I randomly mutagenize bacteria with UV light until I find one I like, that's considered safe, even though I probably have no idea what mutations I've actually made. On the other hand, if I go in and, with ultra-precision, make a single, targeted mutation, that's considered wildly unsafe and the FDA will throw a fit if I try to use it.
There is a raging debate among academics regarding how to introduce these types of technology to the wider public. We all believe that tinkering in the garage is a good thing, but how to do is such that we don't end up sued because we inadvertently provided some kook the sequence for botox, without making things so controlled that no one wants to take up these basic projects. If you would like to learn more about the efforts, I would start with , an NSF sponsored research center of which I am part.