As someone who used to work for the text book industry, these banned word lists are much more common than you'd think. Though, of course, this list is unusually oppressive.
Want to hear how stupid it gets some time? A number of state standards call for students to learn probability so they can understand how to avoid unfair games of chance. But for some reason, you're not allowed to use games of chance while teaching students about probability, and in many cases, you can't even reference dice or playing cards.
Also, how would a health class do without mentioning alcohol or drugs? A US History class without nukes?
These topics are off limits for standardized tests, not general discussion.