If the "no one is harmed" standard is the only applicable standard, then why can't people have sex or masturbate in public? Isn't people's revulsion to that nothing other than their instinctive or learned bigotry against sexual displays?
Laws are there to keep ugly fat disgusting people from showing us their warez. They need to keep their tent tshirts and pants on. No one cares if a young hottie is naked but laws need to be uniformly enforced.
Allowing nudity around children is not something you can overlook with any arguement. As I parent I have the right to raise my child the way I best see fit (within reason of course) public nudity can take part of that right away from me. Who are you (random naked stranger) to decide when my child is ready to see a naked man/woman? Thats what the internet is for...
While American laws about wearing clothing in public have no effect on me, unfortunately the effects of the religion-driven ridiculous cultural prudishness have a much longer reach. The bulk of videogames are made outside the US, and the bulk of videogame players is outside the US, and yet the whole business revolves around US morality. Movies suffer too, but at least they get made whether or not they conform to US ideas; not so with videogames.
Look at the movie Amélie, for instance...
MPAA: R for sexual content. Sweden and Denmark: suitable for ages 7 and up. Norway and Finland: suitable for ages 11 and up.
I would characterize the movie as a light-hearted comedy with no violence and mild sexual content which is never titillating.