You can argue about whether it's a good idea to try to keep track of grade school kids with RFID badges if you want, and I'm not convinced that the technology would perform well in such an app. And just how are you going to make the kids comply well enough to keep the system from driving you nuts? - it's hard enough with adults working under pain of dismissal.
But let's not get hung up about "privacy". What privacy rights does a grade school kid have that a tracking device worn during school hours would violate?
"Sorry folks, we haven't found your child yet. But in the meantime we thought we'd introduce you to the person whose lawsuit prevented us from implementing the technology that could have helped us track your child. This room is soundproof, the tire irons are over there, we'll lock the doors behind us and we'll be back in 15 minutes."