there is no law that actually says beadlocks are illegal, but there is no law that says they aren't either... its one of those grey areas......
as far as why would you need beadlocks, a 16.5 rim doesnt have a standard safety bead as all the otehr tires... this mean the second you air down, the tire pretty much falls of the rim... without a dual beadlocked wheel like the hummers, you air down and your tries fall of the rim sitting still..... since there is no bead, you will also need a huge air tank to get enough cfm and pressure to even try to reseat the bead