The major issue here is assuming this is about political correctness so much as a context sensitive consideration of applicability. Drag isn't something that has the same stigma associated with it as homosexuality or transgender identity, so that could be one aspect of why the performances were banned, since it wasn't something relevant to pride.
Drag practitioners, same as straight people and others that aren't stigmatized, can still join. Pretty sure there's no ban on drag queens in themselves anymore than straight people, merely that the focus of the parade be maintained which is LGBT pride.