The university concerned is South Bank. Well over half of the students are mature and about 60% are from ethnic minorities. Most come from the Borough and from some surrounding boroughs. This makes it a very different place from the more traditional universities. And consequently there are tensions and issues there which other places do not face.
Now, of course, banning anything will always be counter productive because as soon as something is banned it creates the desire to see it and makes people take sides.
The poster is not offensive just rather obvious. And even if someone in the union hierarchy thought they didn't like it, those who displayed it should not be subject to the whims and prejudices of those who find it distasteful.
Perhaps those who achieve - or have thrust upon them - office in the students' union, should have to take a preliminary course in law and the proper use of office.