It is completely legal, by 100%. They extremely want you to use their own software, you got it right the first time
Since it's their servers and what not, they have the right to charge you for whatever they want. The reason they are charging you to use other clients besides their Java one is just because they want to get everyone to say "Wow, pay to use the IRC, I'll just use their Java crap for free.", and then do just that. Anywho, it's a waste to use any server that does this when there are so many that do not.
