To me, that's just PETA being well, PETA.  I might not always take their tactics seriously but I'm usually in agreement with their seemingly ultimate goal - to minimize and eventually eliminate the suffering of all animals.  Sometimes it takes "shock" tactics to really make people take notice.  Sometimes those shock tactics might turn people off - it's a balance and calculated risk, i suppose.

To be honest, even though their ads can have a tendency towards the exaggerated - i feel they at least have a much greater semblance of truth (it depicts murder and cruelty - which is a factual aspect of meat consumption) and I tend to be more insulted when i see a package off bacon or beef burgers with a smiling pig or cow.  There's no way of getting around that such advertisements are tantamount to an out and out lie.

My decisions are personal - so it's unlikely that PETA advertising, or a lack of thereof - would hold much weight either way.  I like to think that i'm able to focus more on the message trying to be conveyed, and less on the pagentry that may perhaps surround it.