Remember back when you could take toy guns to school too? Man I remember lugging around this huge M-16 looking squirt gun all over the neighborhood back when I was real young, it didn't even have the little red tip and it looked damn real (at least I remember it looking real, I was a lil tyke though so who knows how it really looked). I feel bad for kids who didn't grow up in the 80s or before, it seems like it would suck balls to grow up now.
I don't remember anyone at my schools bringing guns, but we certainly had fun playing with them in the neighborhood. I thought many of them looked very realistic (as you said, we were kids). I loved going to the surplus stores and getting all the old army belts, pouches, decorative pins, hand grenades (they bored out a hole in the bottom and removed the explosives, of course), etc.
When my parents gave me the hand grenade, I almost died. It was the koolest thing in the world, as far as I was concerned. It even included the tab and pin at the top (to detonate it)...
The funny thing is that my obsession with the military when I was a kid (I memorized weapon specs for cannons, guns and mortars!) eventually led me to read tons of war history (my dad would bring home a new book every few days, it seemed), which led me to develop a much more critical view of the military and weapons industry.
I don't know if kids today would be allowed to bring in a real hand-grenade for show-and-tell. Man, that was one of the best days
.