The law was changed after some tragic cases of burned children. In nearly every case, the children had gotten hold of lighters or matches and started the fire.
Since there were no smokers in my house, we didn't keep lighters or matches where children could get them. I wondered if the risk from the chemical exposure from sleeping in those pajamas every night may have been greater than the risk of fire.
It turns out that you can buy cotton pajamas for kids. But they have to be called long underwear or something similar. The company has to state that they are not intended for sleeping.
Makes you wonder how ANY of us survived to adulthood if we lived in a time and place when our Moms and Grandmas sewed nearly ALL of our clothing. :)