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Yes, it is allowed, as it is (primarily) a solely graphical enhancing mod (and the drop in FPS probably counteracts any advantage you actually gain)
Hax.Also, I don't experince any FPS drop.
This. SEUS is not the only thing that allows this, there are many texture packs, optifine settings, graphical mods, etc. that would allow it. As none of these really give much of an advantage to players (a very slight one at most), they are allowed.Another thing, if certain texture packs like R3Dcraft that have clear water are allowed, why wouldn't this?