I thought I would weigh in with a female perspective on this.
Doesn't bother me in the least when I hear it being used in a game or movie or whatever, but if someone called me one I'd punch their lights out. Simply because when a man calls a woman a ****, he usually intends to imply that she is nothing more than her reproductive parts, and therefore is worthless to him (as a person) and is simply something that ought to be used for his pleasure. I do not think that 'dick' has the same implications when said by a woman to a man (usually just means you're a jerk). In that way, calling a woman a **** is a lot like a white person calling a black person a ****** - it reminds them of a time and a culture where they were devalued to the point of being not a person.
So yeah, it is pretty offensive if you say it to a woman, otherwise it's just a more shocking version of the word 'pussy' when directed at a man or used as a general expletive. And it's true that it is used a lot in real life, so art is more than free to use it as well, so long as they realize what the use of it will evoke in certain people.