Scary Surprise In Child’s Birthday Cake, Should Parents Sue?

Nathan Bibeau was celebrating his son's two year old birthday, and bought an Elmo cake from Walmart. After the cake was cut, it was discovered that a pairing knife was in it.

Apparently the baker left it there before the baking process and it went unnoticed after it was baked. Now, here is my question. no one was hurt, Walmart refunded their money, and offered a couple other things to make up for the incident and no one was hurt at all, but NOW, the parent wants to sue.

Should he just let it go, or is he right in wanting more compensation?