using that line of reasoning, you should equally be matir ALL milk, not just powdered. i dont understand why that reasoning should be more applicable to powdered than not powdered.
R’ Moshe ZT”L is matir all milk based on that reasoning; Rav Tzvi Pesach ZT”L apparently disagrees, since there was a g’zeira. He maintains, though, that powdered milk was not part of the g’zeira.
The main question here is: can someone who generally uses Cholav Yisroel milk also enjoy a Hershey Bar, assuming that a Hershey Bar is made with powdered milk? I see it as YES, since (1) the same heter which makes Chalav Stam into Chalav Yisroel in the U.S.A.;
This discussion is about differentiating between regular milk and powdered milk.
(2) the g’zera was not made on powdered milk;
That’s a machlokes; the Chazon Ish says it was. See my earlier post for Chelkas Binyamin’s proof.
That’s irrelevant to the essential heter, and wouldn’t either create a “shas had’chak”. That reasoning does apply to pas palter to make it eina m’tzuya, but it doesn’t apply here.