Grease an 8x8 inch baking pan. In a small bowl, whisk together the powdered sugar and cornstarch. Dust the pan generously with the mixture, coating the bottom and sides.

Pour 1/2 cup of cold water into the bowl of a stand mixer. Sprinkle the gelatin over the water and let it sit for 5-10 minutes to bloom.

In a small saucepan, combine the granulated sugar, corn syrup, and the remaining 1/2 cup of water. Cook over medium-high heat, stirring until the sugar dissolves. Attach a candy thermometer and boil, without stirring, until the mixture reaches 240°F.

Remove the syrup from the heat. With the mixer on low, carefully pour the hot syrup into the gelatin mixture. Gradually increase the speed to high and whip for 10-12 minutes until thick and glossy.

In the final minute of mixing, add the vanilla extract and the Kool-Aid packet. Mix until just combined.

Quickly pour the mixture into the prepared pan and spread evenly with a greased spatula. Dust the top with more of the powdered sugar/cornstarch mixture. Let it set uncovered at room temperature for at least 6 hours, or overnight.

Turn the set marshmallow slab onto a dusted cutting board. Cut into squares with a dusted knife or pizza cutter. Toss the cut edges in the remaining dusting mixture to prevent sticking.