I think the point of Drag Queen Story Hour is it's an easy way for parents to prove to themselves (and friends on facebook) that they're the Right Sort, and they Accept Diversity. A silent scream of "I can't be homophobic, here's a picture of me and my toddler near a man who might be gay!"
Full disclosure- I would probably have been all for it, aged 18, and might even have taken toddlers to it. Fortunately, I didn't have any toddlers to take, and no such thing as Drag Queen Story Hour existed at that point.
These years later, if I do ever feel the need to visually signal that I'm not homophobic, I'm sure I will be able to find better ways than taking my toddler to see a drag queen. It's rather homophobic that we're being encouraged as a society to associate drag with being gay, tbh.