I think you're kind of making a big deal out of nothing. I agree, eating the buggers is a bit gross, but lots of people pick their noses ... just most do it in private and with the aide of a kleenex.
We told our 5 year old that he needs to be in private or in the bathroom. We've been telling him this for a couple of years, but he's been pretty good about it lately. He's never tried to put it in his mouth. Yeah!
Our 2 year old puts them in this mouth. That really does gross me out, but I really do believe it's just the "yuck" factor and it's not really going to hurt him. Not sure what I can really do to stop a 2 year old from doing this ... at least for now.
Just remind her that it's not polite, hand her a kleenex and tell her to wash her hands.
Sorry, just doesn't seem like a battle worth fighting.