Great question! We are very passionate about proper vapor barrier methods for this very reason, and it is our belief that the plastic is an incorrect method for our region.
According to section 318 of the 2006 IRC code our zone (4) being St Louis and surrounding county, a vapor barrier is not technically required. If a barrier is used and not covered it is required to have a flame spread rating no greater than 25, or be covered with drywall (I urge you to check with your local municipality on this, as many of these codes can be up to interpretation). If in doubt, I recommend simply covering the wall with drywall and do a minimum “fire taping” job. This would be good insurance and will make for a tighter wall no matter what insulation system you use.
The plastic vapor barrier system has been improperly used in our area for decades and builders are slowly catching up with the curve. It was considered correct when the practice began and not everyone agrees that it’s a problem today. These things take time.
With the country and world wanting to build tighter and tighter, techniques are tried that work in some areas but not in all. For example, vapor barriers should be put to the warm side of a wall. Well, in St Louis no matter which side you put it on you are correct for only half of the year, given our climate. Then you get into perm ratings, and so on and so on.
Bottom line: we believe it is healthier for the home and occupants to breathe rather than suffocate in plastic. This is probably not something you can hold the builder accountable for given it is still a common practice. I would investigate a possible warranty claim, but that’s about it.
I recommend replacing the insulation with a “BIBS” system. (Blown In Bat) or un-faced bat insulation with no plastic. The perm rating of plastic is so low that the walls can never dry out when condensation builds up. Kraft paper-faced insulation is acceptable because it does allow moisture to permeate and it is easier to install since there are tabs to staple it to the studs.
Do be careful when removing the insulation: black mold is potentially dangerous and needs proper handling when removed for your health and safety. Once it’s removed, it is a good idea to spray the areas with bleach and let it dry for a few days. Additionally, I would also apply an oil-based primer to encapsulate any mold that’s deep in the wood.