I apologize. I was wrong on two things.
1. You can only buy food with food stamps. Toiletries/household supplies/paper products are all on your own dime according to the SNAP website.
2. Many people have mentioned that it is intended to supplement your income. I assumed that many people on food stamps probably would if they had a job or some extra income, but most people on the program only had food stamps to buy food. However, according to some USDA statistics, 75% of SNAP participants use a combination of food stamps and their own money and only 20% of SNAP participants have no income (including government assistance). So some people rely solely on food stamps to eat, but most have other incomes.
A quote from the Washington Post article: "[T]he maximum monthly benefits can quickly climb as the size of the household grows. A family of four, for instance, could receive as much as $668 a month for food."
So apparently it is not as bad as I thought. I will still donate to a food bank, but that is quite a bit of food for thought...