I don't think a government should have the right to ban somthing simply because they find it offensive, tacky, or disgusting. There are many great artworks, books, paintings, ect that are disgustiong or offensive to some people, but I do not feel that the government has the right to interefere with or ban those things.
Obviously, I don't think this advertisement is great art, but I think the same principles should apply across the board. Since when is it the government's job to control the quality and content of Advertising? The government should maintain law and order, and that's about it. I don't think it should be up to them to decide what advertisements are shown in magazines, or to decide waht is or isn't "allowed" in their media.
To me that's too much governmental control, and it's a bit creepy.