There's no mention of money in the ad, so I'm not sure how it can be investigated as solicitation for prostitution. Also, I totally should have tried this back when I was in college.
If its stupid and works, then it isn't stupid.
They were a bit too blatant. They should have been much subtler on the sex part, and may have actually gotten away with it or at least not attracted so much attention from LE.
If they had used the Terms "Personal Attention" or "Intimate Time" they might have skated it by. This really isn't much different from some of the SB/SD relationships talked about on the National level of the board except for the number of guys involved. I'm sure that these guys got more than a few responses to their ad and since there is no mention of $$. I don't think any of it is actionable (at least by the local Police, the University may be a different matter depending upon where the house is located and Faternity rules). Except maybe by some of the guys girlfriends now that the arrangement they were seeking has been made Public.