You are all assuming the municipalities have even formally adopted a certain code. There are several codes including NEC, CABO, BOCA, etc. Everywhere is different and in many cases up to the local city council or aldermen. I can tell you in this situation that almost any carpenter worth his salt should know you only use #1 grade lumber for floor joists. The spans and spacing used may have satified the codes adopted, but that is a minimal standard! The holes that were drilled are probably not causing that much of the deflection, but they are not correct. Holes should only be cut or drilled in the center 50% of a joist.