I think my biggest gripe with the name Kraken isn't that its a mythological beast with little association to the area or even that it is a non plural team name, but rather it is a singular creature. This would be like naming your hockey team the Tusla Godzilla. How about the Boise Harry Potter?
However, I did a little (very little) more research into the name and discovered an English language usage message board discussing if Kraken can be pluralized. The users there cited ancient Norwegian standards, common standards, and the way that would translate into English to determine that Kraken CAN be pluralized as Krakens. They cited uses in more recent SciFi and Fantasy novels as well including one about a Galactic Football League that used Krakens as a team name.
Kraken is a nonstarter for me, but I think I could live with Krakens.