If you really want to make an argument, I think there are a few points:
a) Drag, as a form of entertainment or maybe even as an art form on accasion, is about how gay male sexuality interacts with social presentation and culture. As such, even when very intelligently done, it's not intellectually accessible to, nor is it of interest to, children.
b) Becase of point a, it's often going to involve very sexualized costumes, jokes, and context, which are not appropriate for children. All the more so because they can't interpret their meaning accurately.
c) Despite some attempts by people like RuPaul to sanitize drag for corporate purposes, it is mainly something that takes place in environments highly unsuitable for children. That is, clubs where there are a lot of drgs and a lot of very sexalized behaviour.
d) Typically the excuse for these kinds of events, from the POV of library and school organizations, is that it serves their DEI initiatives. These are very powerful directives that come down from above which say schools have to spend a certain amount of time promoting certain ideas. Of course it is meant to be done in an age appropriate way that will capture kids' interest. Libraries struggle with how to bring sexuality diversity to their childrens programming and having kids colour flags, or these storytimes, is what they come up with.
It either doesn't occur to the actual organizers - or they feel they can't question - that when it comes down to it, you probably just don't need to be pushing queer activism on the storytime set (or maybe any activism.) Nor does it occur that drag and flags etc doesn't mean much to the vast majority of gay people who may in fact dislike all of that and are just normal people who act and look like everyone else and don't feel the need to talk to other people's children about sex.
So when challenging these things, it's maybe worthwhile to keep that background in mind, because these organizations are often desperate to fulfill these programming obligations they've been given.