I agree with meg that there are a lot of parents out there that are blind to what is wrong with their children.
But I think to send home a "report card" would be humiliating!

These children are already the target of fat jokes and cruel children, how much worse is it going to make them feel to have a report card saying how fat they are? Talk about killing a kid's self esteem.
I like the idea of having one on one conferences with parents - maybe the school nurse or counselor could do this, and get permission to set up an appointment with the child's pediatrician.
As far as getting rid of PE, many schools are also trying to do away with recess, too! They want these kids in desks all day long being crammed with knowledge. No fresh air, no breaks, no movement. All because we have to keep up with other countries (or because some Senator wants to look good at re-election time.)

And you have to be able to
afford to play team sports for your school these days. No getting out there and just playing anymore.