They're not stopping him from flying it. They just say it has to be on a pole. His display is good looking and very unobtrusive. The difference is ludicrous, true, but that's their rule.
This is just a battle of wills. Originally, the rules said his display is ok but they changed it. He had agreed to abide by whatever their rules say. They're playing hardball by changing the rules, he's playing hardball by ignoring it. Both sides are wrong about how it's being handled.