Yes, I just replied to that, initially responding to you and then the other guy who said similar. Why do they need to (or why is it "important", if you prefer), then why do they want to. See above.
You misheard me then. You asked why they want to, I replied with some possible reasons. I don't think something should be allowed based on enjoyment, but things should be disallowed based on potential harm assosciated with that. Serial killing is fairly self-explanatory for that one. As for shows, I'm going to guess that we both agree that non-drag shows are unlikely to cause harm. I would then say that a show where a man dresses as a woman doesn't pose any greater inherent harm than a show where a man dresses in whatever other way.
As for the rest, it looks like we've arrived at the actual argument you wanted to make. Firstly, "legally wrong" is a bit circular. This is about something potentially becoming banned/illegal in the future and the presumed question of if that should be the case. "This should be banned because it has/will be banned" doesn't really work, but whatever, this is probably stemming from the enjoyment thing.
Morally wrong? Depends on your morals, I don't think a man wearing clothes that aren't traditionally masculine is morally wrong. But you use the example of a thong. I'm going to guess that the problem there isn't that it isn't masculine enough, but that it's too revealing or is probably going to be used in a sexualized way. So the same problem as a man being nude or close enough in front of kids. Agreed.
So if that's the case, I'd question why dressing in drag is being equated to a sexual act. Having been to a few pantomines, that seems flawed. For what its worth, the bill is apparently claiming to focus on adult drag entertainment based on the article, and, yeah, its called "adult entertainment" for a reason. The criticism against this bill seems to be its vague wording, suggesting that it could be used to class any sort of drag as "adult entertainment" even if it, well, isn't. If I were a family-friendly performer who dressed in drag, a possible $2500 fine and jail time would be pretty concerning. I probably wouldn't just "trust" that the government's opinions about what is classed as what would line up with my own with that hanging over my head.
Maybe the wording won't be abused, but you sort of have to wonder why the bill is specifically targeted at drag performances instead of the alleged actual root of this: don't let kids see adult entertainment. Drag or otherwise.