Irony. It's not a new concept, folks. The song -- at least the most notable versions, such as the one recorded by Traffic -- is a metaphoric tale about the production of alcohol from barleycorn. The humor comes from the fact that the killing and maiming of John Barleycorn is ironically presented as an evil act, while it actually creates the substance the "killers" desire (and the singer of the song is winking at us the whole time, with a glass of beer in his hand).
I think it mocks those who see alcohol and its production as evil by turning the tables and metaphorically describing the process of making alcohol as an evil act against an individual -- poor John Barleycorn. John Barleycorn is dead -- thanks to (the fertility) God! Now drink up.