All true... and yet, this is not about advertising a school event - the parents of children are the ones who go to the fair anyway. It is cheap and plentiful advertising for estate agents placed ideally. They could well afford to support local school fairs as a goodwill community gesture and still get a banner at the fair in return.
If these signs said Drink Coca-Cola (proud sponsors of...) then I can't imagine many people would agree to having them. Am not sure why this is perceived differently.