Yes, it is misused. Letting your freak flag fly means not being ashamed of your noncomformity. This is something you would say to a D&D player who locked their books in a cabinet, it is not something you would say to someone to convince them to take up a hobby.
Yes, it does play off negative stereotypes. The "freak" is clear as day.
Yes, Mad is popular. It's on nearly every newsstand across the country, and newsstands receive magazines based on their popularity with a demographic- Barnes & Noble, for example, has no control over which magazines they carry.
Yes, it does insinuate D&D is for freaks. It's tongue in cheek if you recognize the term "let your freak flag fly", but if you don't, it's simply the word "freak" under a D&D box.
No, it's not popular to be a D&D player. Let's not kid ourselves.
WotC's current ad campaign is light years better than the days of Jami Gertz and some 30-year-olds in preppie gear sitting around a table acting like they just found Jeebus while a voiceover gushes about "entering a world of adventure!"
Those were the ads TSR ran in the early 80s, look again. During the 90s they used a lot of company-owned art to make ads such as claws tearing through paper saying "It's coming" (That's great, what's coming?), a dragon breathing fire on the kewl new book with the statement that
this will kick your ass, and a lot of things to that nature.
I really have to wonder about people who are offended by these ads.
You completely misunderstand my position. The ad doesn't offend me. I'm not trying to stand in the way of D&D being successful. I want people to start playing, but I think ads like this are a waste of WotC's money and I'm disappointed that this is what that exciting promotional campaign amounts to.