You know, at this point i am thinking it really is an armour and context problem more than one of pure character design.. ( although, jiggle-physics needs to be heavily re-thought... ) as people are pointing out there are appropriate and inappropriate times for any person to be naked and or attempting to be sexy or attractive the main issue is some ( or even a majority ) of these characters seem to exist ONLY for that purpose.. if you equip them with full armour, you'd probably be surprised to see even extreme breast sizes pushed back and made more streamline and less obvious, used correctly you could make a reveal in an appropriate way later in some kind of appropriate setting, if there is one in said game such as an infiltrate the enemy camp, seduce target x, or what have you.
I think this is where games like doa: volleyball gets something of a free pass, because they do fit the situation well in countries where it's perpetually sunny volleyball players would be half naked and people do show off all the assets they can, because deep down, you know if you got it you want to flaunt it, it's human nature.
the thing is our games are reflections of us, and part of what makes us is our sexuality so completely ignoring it is probably as bad as overdoing it to the ludicrous extents that some games have.
that said not every game needs sexualisation, of any kind. if you have a medieval warfare game, i expect to see farmer's wives milking cows and less than 5% of the female population involved in any sort of combat, purely because that's essentially how it happened. ( women were discouraged from fighting, but some did anyway to protect their homes ) and not every one of them should be the most attractive woman on earth either, or ludicrously over sexualised.
it could be argued that in this situation a particularly rugged strong female character would be more attractive in that role anyway as both 'yes you can, you go girl' and a dam, she kicks all the asses and looks pretty fine.. ( at-least to some ) and not 'need' any over the top super-sexualising.
basically, sex is a thing it happens, it's part of life. but uberjigglephysics is generally just worth rolling your eyes at but it could be both tasteful and helpful to the game if it were done right. ie, in an extremely subtle way.
we should make a poll : 'bring back subtle sexualisation' or 'nah it's fine trolololol'
i'm sure that would go better. but it really makes no difference, games will be made and bought with silly jiggles and oversized thighs, just avoid them if you want to feel better about it, really.