Encrypted Weak Auras requiring monthly sub to download legal?

No, but blizzard will likely do nothing. You shouldn’t even be able to sell WA packs as that is antithetical to the spirit of addon rules, but unfortunately nothing is ever done because $$$$$$ is involved on many ends.

Its unfortunate because it harms the integrity of the game.

Its literally the first rule in addon development, but see the lawyer types argue the packs aren’t part of the addon; even tho in actual practice they indeed are. They claim this because the packs are not made by the addon developer itself, but the thing is, many addons are developed and updated by numerous contributors, and those WA packs are effectively development of an addon because the addon itself is a tool for less skilled people to develop addons within a framework IE WA, and the packs are in themselves effectively addons to the game built on that tool.