ShadyJ has it right.
Looney Tunes, like all cartoons of the early history of the cartoon, were not addressed specifically towards child audiences; they were intended to be enjoyed by everyone, and that includes adults.
The dialog was written such that there were jokes for children, teens, and adults inter-spread throughout the program. One clear example is the historical references in Bugs Bunny cartoons, or the highbrow Classical music ("The Merchant of Venice", "The Barber of Seville", reference to the famous conductor Leopold, etc).
Something for everyone, so to speak. So, we had adults and children watching and enjoying cartoons together, with the adult available to provide context to the child, and being able to offer constructive explanations if a child should ask about an adult theme.
That changed in the mid 1960's and really gained traction in the 1970's, when advertisers realized the power of direct advertising to children.
The net result was cartoons now cater exclusively to children, with virtually no dialogue intended for adult entertainment.
The unintended consequence of that is now we have nannies patrolling the airwaves looking for anything inappropriate to a 10 year old, since it was now the case that no adults were likely to be in the room watching with the children, there was no adult entertainment value in the programming.
And that is why Looney Tunes is now treated as "inappropriate for children" because they are treated the same way as a cartoon that no adult could sit through or enjoy for it's own sake.