Red wine vinegar is produced by the metabolization of alcohol to vinegar. There may be trace amounts of residual alcohol remaining (also true of many other products), but to suggest that a restaurant needs to announce that as alcoholic is a bit of a stretch. Do retaurants need to describe the vanilla ice cream as alcoholic if it includes vanilla extract? Give the place a break.
I'm hoping that Lou Reed misunderstood what the product is. (Maybe his server should have explained! ;-). He had a serious liver condition and a history of substance abuse, so I understand the sensitivity to consuming alcohol, but - even tho I'm not an MD - I'm guessing that the salad dressing wasn't going to be an issue for him.