I think the concern has more to do with the people with kids who do not want to be explaining to their 8 year olds why that man is dressed like a slutty woman and why that other man just grabbed her fake boobs and made a "honk-honk" sound.
Personally, I would rather see Rascal Flatts (and I am not a country music fan) or something with Lynnard Skynyrd (but I love rock music).
I also think that Al & Chuck misrepresented the ground rules to carnival - or to their own guests - (one or the other). The problem happened when Carnival found out there were drag queens fuly expecting to be able to come onboard in drag; but it was not Carnival's duty to contact them and say "nun huh - no can do."
It was Al & Chucks responsibility to handle that communication problem. Carnival should have stayed out of it, and just enforced the rules they notified Al & Chuck about.
However, as so often happenes these days - when there is a FUBAR too many people just prefer to say nothing rather than face the music.
"it's not my fault" "That's not my job" or "Don't talk to me like that, I just work here."