I think the town is being reasonable. Chickens don't belong inside of homes, the belong outside. Chickens are not parakeets, and they are not cats, or dogs. They are a flock animal that does best outside, where they can scratch around and doing the things they have been doing outside for hundreds of years. Chickens have not been fully domesticated like a dog or cat. And this whole chicken diaper thing is insane. I for one will be writing a letter to the city in support of their policies/codes.
And once agian, they are not meant to wear diapers.
You want to show your kids the value of a pet? Get them a more or another appropriate house pet. Why put a chicken into a diaper with candy canes on it to fulfill some need you have?