my only guess as to why they're not banned is that they haven't spread past St. Louis, and they're such an institution here...if more people knew about them, they'd probably suffer the same backlash as Joe Camel did.
however, my favourite part (other that the chicken stating "cheap! cheap! fun! fun!, of course!) is when Dirt Cheap Fred says, "the more she drinks, the better you look! remember to drink responsibly..." i've never heard such contradictory advice jammed so close together in an advertisement.