Honestly, I think the problem at the minute is we don't see enough during sex scenes. Mass Effect has probably generated more controversy than any other game regarding sex, but what do the actual scenes show? A bit of kissing, a little rolling and tumbling, maybe a bit of arse. Nothing you wouldn't see in a 12-rated film.
Thing is, Mass Effect is about as explicit as games have gotten. Every other game decides to use that bloody "fade-to-black" approach. I can't understand how we can show characters getting shot, beaten up, and blown into the tiniest bloody pieces, and yet we feel we can't show a perfectly natural pair of breasts. We all love breasts (well, if we're hetero male gamers). Breasts are lovely things. So why do we feel they can't, in a mature, responsible context (not Ivy-style in SC4), be shown? We can witness, and even take part in, acts of horrific brutality, yet we can't be shown anything for than a titillating bit of arse and a fade to black? Talk about double standards.
I've mentioned this in another thread, but we need to move away from constant violence if we want games to grow as an artform. Sex is just as much a part of life as violence, so why don't we explore that? There is still a shocking amount of bigotry towards people of different sexualities: why can't games get on board and challenge those bigotries? If games want to truly be recognised as art, they need to be able to explore all aspects of the human condition. Sex is such an inescapable part of that condition, that to shy away from it is to do the medium itself a disservice.
EDIT
Seem to be a lot of social conservatives out and about on this thread. I would ask you all to consider why sex is so 'unfit' to be shown on screen, yet acts of shocking violence are. Seems to me sex is a lot more natural than chainsawing a guy in two a la Gears Of War.