Well this topic has made for an interesting read!
On the subject of the original advert - it's a fairly crap ad but I wouldn't call it offensive - misleading to a certain degree potentially, and if I shared a particularly close affinity for poultry I might consider it somewhat crass to parade a chicken around for the purposes of selling more chicken based fast food products, however I'm finding it hard to muster up too much hatred.
As for the debate on food standards, whether we should eat so much meat etc. Whilst I'm very much a carnivore the welfare of animals is still on my radar, I try to buy organic or other products where I can have some degree of confidence in the standards in which those animals were kept. There is no doubt that there exist practices in the farming industry worldwide which fall below what I would say we should hold as acceptable as a modern society - I think I said it in a previous post on this subject but my general view is that I am happy eating meat and other animal produce (milk, eggs etc.) but that doesn't mean we have to be total dicks to animals in order to facilitate this.
I guess it comes down to what value we place on livestock - are they simply commodities that we should be able to do whatever we want with, or are they creatures that we should show a degree of care/respect for in order to benefit from their meat/produce? Or, as is the vegan position, should we just be leaving them alone entirely? I don't know - there obviously isn't a "true" answer to that question as all positions have a valid basis. But where we sit on that issue effectively determines our position with respect to the cost/benefit analysis of eating these products - is the benefit we get (eating something we enjoy) worth the cost it entails (impacting the life of, and ultimately killing, an animal).