I don't think that while as a modifier can set $_.
nope the problem is not there. the following line works as expected
 perl -e 'print $_ while <>'

The problem must be with peculiarities of lexical declared with a modifier in the same statement.

Anyway you could write:

#!/usr/bin/perl -w
use strict;
my $foo_text;
while ( <DATA> ) {
  $foo_text .= $_;
}
print "$foo_text\n";
__DATA__
foo wears foo shoes at the foo store
[download]

or

#!/usr/bin/perl -w
use strict;
my $foo_text;
{
  local $/;
  undef $/;            # see perlvar
  $foot_text = <DATA>; # slurps contents after __DATA_
}
print "$foo_text\n";
__DATA__
foo wears foo shoes at the foo store
[download]

-- stefp