CRISFIELD, Md.—Can you have your cake and island too? The folks on Maryland’s Smith Island, tucked offshore in the Chesapeake Bay, have tried mightily to save their dwindling archipelago with a distinctive eight-to-twelve layer cake. The cakes have done great. The island, less so. Smith Islanders have long baked a cake called the Smith Island Cake, with up to a dozen pencil-thin layers of cake and frosting. And for nearly as long, the island’s economy and population have slumped—to 169 citizens at last estimate. So in 2008, state lawmakers hit on a solution: Make the cake the state dessert. On...