Labeling regulations strive to balance the risks against the costs of reporting. Since people with severe allergies can die in minutes from exposure to tiny quantities of materials like peanuts, it is critically important to them to know if the foods they eat might contain allergens.
Although symptoms can be treated, there is no known cure for allergies or for most food sensitivity. Avoidance becomes paramount. The public relies on food manufacturers to disclose on their labels the presence of even small amounts of allergens. At first blush, that might seem to be a simple matter--after all, surely the manufacturer knows whether peanuts are in the product or not.