At first I thought illegal, not because of the Tannerite but because of the baiting. Tannerite is fine if you leave it unmixed until the time and place you are going to use it.
I knew there were laws against baiting but after a quick check it looks okay for squirrels. You can't bait "Resident Game Mammals" at all. But, you can bait for "Nongame Mammals" as long as you're not using dogs also.
So feel free, blow them to hell
Reference 475. Methods of Take for Nongame Birds and Nongame Mammals