The Rama in O”H Siman 696 states that there is no issur because it is done for “simcha be’alma”. This is as clear a heter as one could find, and it’s black on white in the Shulchan Aruch.
However, others, (Shlah,Bach,Taz, etc…) were very much against this custom. It’s interesting that the custom did exist in those days and apparently the rabbonim were forced to discuss how much to oppose it. A lesson for our days.