They're not saying that they want control over the walnut industry. They're saying that the claims Diamond made that the intended use of their product cures or prevents a disease makes it labeled as a drug. For them to make such claims requires approval as a drug.
In either case they're wrong. They made claims that it was HEALTHY, not that it was a miracle cure. The FDA has no right to want to have walnuts labeled as a drug.
I'm assuming that unless Diamond is doing something especially special to these walnuts they're relatively the same as all other walnuts, which doesn't change the issue at all. People say things like that about all kinds of fruits and berries, I haven't seen the FDA go after oranges yet.
They said it could prevent heart disease and cancer. How much more of a miracle do you need?
They also had like 57 scientific studies to back them up, not to mention the 35 peer reviewed studies the US National Library of Medicine database has.