No, this isn't a skit from the Kids in the Hall or the Upright Citizens Brigade. AYDS was an actual diet product that was on the market in the U.S. in the early and mid '80s, just as the AIDS virus was coming into the national consciousness. Anyone under 30 reading this may be surprised to learn this product and commercial were not immediately pulled from the market as awareness of the disease spread. In fact, as anyone over 30 can tell you, the two co-existed in the same collective consciousness for many years. This caused many children, such as myself, to react in horror upon seeing a candy that transmitted a terrifying, deadly disease for sale at the local Revco. (I mean, what if someone slipped this into our milk at lunch when we weren't looking??... This was our thinking, anyway.)
Finally, in 1988, the makers of AYDS gave up their bullheaded attempt to keep their familiar product name "come hell or high water", and they renamed their product. Their new name? DIET AYDS.