Boring answer: Why not?
Longer, unclear answer: At some point I just started playing female characters rather than male ones.
I don't know why, I can't connect it to any noteworthy change in my life or personality. It just feels right.
It has nothing to do with how other people see me, since I never play online multiplayer or MMOs, and it has nothing to do with distancing myself, since I've never felt it to be harder to relate to a female character as opposed to a male one.
Also, the "if you're going to be staring etc." argument doesn't sound right to me. When you've played a game for a few hours, you're not "watching" your character anymore. Even if you were playing as a character who was completely naked, after a few hours it would probably become mundane. Besides, what games are you playing where you spend the game staring at your character's ass? Shouldn't you be fighting something?
That said, I fully agree that women look better than men. It's beyond just "sexiness", when you have a female character with swords and/or lasers, it just looks cooler. At least it does to me.
On a related note: I'm also a huge fan of Yuri manga, so that might have something to do with it. Especially in BioWare's games.