Arguably the airline has a duty to customers to provide a healthy environment, but then you come to the minefield of how to enforce that / define where the boundary is... Airlines do not allow drunks onto many flights - why should they allow people on who could affect the health/enjoyment of the flight in other aspects?
Imagine the lawsuits though...
I had a similar experience on a Coach from Avignon to Lyon - everyone who carried all the personal effects in those checked laundry bags had a distinct odour
Ok, back to being PC now
Martin