Was the so-called town journal not written by someone on the production team? Was it coincidental that every showdown and every "lesson" learned in a particular episode coincided with the journal reading? Production called the shots, not the kids. Even when they appear to be making their own decisions, such as reward choices, gold star recipients, etc, you can bet suggestions were offered by the producers. The fact remains that the show promised a successful society built by the kids. It didn't deliver.
If you take a gander at the Kid Nation Media Thread, you can read a portion of the liability waiver that states parents cannot sue the network or producer if their child dies, becomes severely injured, or contracts a sexually transmitted disease. Sounds like even the producers and the network's legal team anticipated "hormonal" teenagers.