A regulation allowing anyone to legally work around its intent is more than ridiculous -- it has no substance and is the same as if it didn't exist at all.
I don't think that statement is actually correct. There was an experiment done where people where told to eat until they were full out of a bowl of soup. And the amount people ate was strongly correlated to the size of the container, despite everyone believing they only ate the amount they needed.
I believe intent of the law may be served nearly as well even if one or two additional drinks were free. i.e. $2 for the first 16-oz drink, and then second drink was free.
There has been a lot of research in this area, that shows that the slightest nudge in the right direction can actually change people's behaviour quite a bit.