That's from Zuimonki, Chapter 1-3, tonight's reading at the Monday night Zen service. Everybody has their own strong feelings about this issue, and it led to a lively and very interesting discussion.
On one occasion, Dogen said,
In the assembly of Zen master Bussho (Fuzhao), there was a monk who, when he was sick, wanted to eat meat. The master allowed him to do so. One night the master himself went to the infirmary and saw the sick monk eating meat in the dim lamplight. A demon was clinging to the monk's head, eating the meat. Although the monk thought he was putting it into his own mouth, it was not him, but the demon who was eating. After that whenever a monk fell ill, the master allowed him to eat because he knew he was possessed by demons.
Thinking about this story, we must carefully consider whether to allow it or not. There is also an instance of eating meat in the assembly of Goso Hoen (Wuzu Fayan). Whether allowing it or prohibiting it, the ancient masters surely had their own deep considerations.
What seemed more upsetting to most people, though, wasn't the killing of sentient beings for food per se, but the wasteful and unsustainable way the food's processed and distributed in Western, consumer society. Not that they condoned the killing, but if one must kill, must it be done so mindlessly, with so little compassion, with so little gratitude for the being giving up its own life for our sustenance?