I don't think that anyone is saying that the reason Elk is worried about lawsuits is because "It's PENNSYLVANIA." I would say that a more realistic reason is because Elk is privately owned, whereas many larger resorts out west or up north are corporately owned by companies like Intrawest. Elk is fairly uptight about safety across the board, from no glade skiing, to no the no backpack rule, to not having any gapped rails in the park. The mountain has pretty good reason to be concerned about the risk of lawsuits; a few large ones could potentially put them out of business.
Also, not to be a bitch, but about how no one bothered to tell you that backpacks were not allowed on the lift while you were on the wagon and getting ready, did you really expect them to realize that was your intent given the fact that nearly everyone else comes to the mountain with some type of pack to leave in the lodge?
As you said, Elk IS the best mountain in PA. They have outstanding terrain, a friendly staff, and a pretty laidback air. That said, they certainly have the right to ask that you do something as small as staying out of the trees or not wearing a backpack on the lift. Boycotting the mountain for this is rather excessive, but to each his own i guess.
Good luck finding a place where you can live a risky mountain lifestyle.