I think the problem is that Mr. Potato Head (and Mrs. Potato Head, who was never consulted about this) is no longer popular, especially with the Toy Story saga being wrapped up -- I think -- so instead of using clever marketing, they just went with something that could be considered "controversial." Hence, "Potato Head."
But seriously, I wasn't the only kid who tried putting a moustache and lipstick on the same potato at one point, right?