If the government were smart (huh?) , they would call a mandatory parent meeting and inform them of the situation complete with full sized (edited) photos that have been discovered. Send mailers home as well.
“These are your kids that are being photographed. These pictures make it to the web where pedophiles eagerly seek sick gratification at the expense of what your child thinks is harmless fun. Please go home and check your child's phone and computer. Please discuss the legal and social ramifications associated with this behavior. Please monitor and protect your children in the interest of their own safety, self respect and character.”
Let the parents deal with it and come down hard on repeat offenders with school discipline. If you have a chronic problem with a student, congrats, you may have just detected problem that will go into adulthood.
But your's and other's comments are right: They are just kids being kids. This shouldn't be considered a criminal problem. Especially not when it could mean they'd have to be registered sex offenders for the rest of their lives.