Our very own Bob "MovieBob" Chipman once made an important distinction about Bayonetta; it has often been said that Bayonetta moves like a stripper, but it's more accurate to say that Bayonetta moves like a dancer. For, you see, a stripper dances for YOU, Bayonetta dances for the same reason she does everything; to have some fucking fun!
Another important note is that, while her sexuality is an extension of this, the aspects of Bayonetta's personality that make her appealing as protagonist are similar to that of characters like Dante. She's not a complex character, but she, like Dante, is relatable because her devil-may-care attitude reflects that of the player in an over the top setting such as her own.
She KNOW'S the game is not to be taken seriously, she's just here to goof off and kick ass. If the sexuality was dropped from the character, I dare say she would remain appealing.
Back when dinosaurs ruled the earth and DMC 2 came out, everybody was upset because Dante had transformed from a self aware, super human joker into wet blanket that walked like a man since his debut release. Say what you will regarding characters like Dante, Ryu Hyabusa and Bayonetta being simplistic, but their charisma cannot be denied. They are a natural result of the games they inhabit, and they work perfectly within the setting.
The point of Ninja Gaiden, DMC and Bayonetta is not, has never been, and should not have to be to tell an engrossing story, immerse a player in a rich setting, or to make a profound statement. The point of these games is simple, and I find it rather wholesome; they exist to bring joy.
And joy is the operative theme here. Silly, over the top, insane, irrational, kid-on-Christmas-morning joy! That's what Bayonetta, Dante, Ryu and Kirby mean to me.
And yeah, Bayonetta is sexy as hell and was designed to be that way, but I don't see what's wrong with that. If we're arguing objectification, I would assert that, by the logic that if a character is designed to be appealing they are objectified, every fictional character written with the intent to elicit attachment is objectified.
It must be understood that art is fundamentally a practice of illusion and puppetry; a lie; a collection of elements meant to resemble desirable or realistic things without actually being those things.
Every character is essentially being used by their creator and their audience, sometimes for sexual reasons, sometimes not. And sometimes for sadistic, condescending or patronizing reasons. Even under the latter circumstances, however, I don't think any of this is morally wrong. After all, fictional characters are fictional; they don't have feelings and can't be hurt. Working out your issues within the realm of fantasy is healthy.
I think that where Bayonetta stands out is that, while she is supposed to elicit sexual arousal, she does not elicit it in a negative or insidious way. Bayonetta is not like characters such as the women from those abominable RapeLay... things, who's sexuality is portrayed as out of her control or as a weakness. Nor does she resemble characters such as the DOA girls, who from my experience, are essentially celibate and totally ignorant of their sexuality or totally disinterested in it (For the most part). Correct me if I'm wrong, but I'm not aware of almost any examples within DOA where the girls took an active sexual role for it's own sake; they seem to show either little to no interest in sex, or use it for ulterior motives. Speaking of ulterior motives, Bayonetta also does not resemble characters like Catwoman or Poison Ivy, whose sexuality, even when it isn't used for the aforementioned ulterior motives, is still portrayed as dangerous or problematic.
I feel that the creative spark behind Bayonetta is fairly innocent; it basically consists of "Awesome super powers wielded by a sexy, flirtatious chick with some S&M thrown in for comedic effect". I would also stress that the aforementioned S&M stuff is restricted for use on those weird, emotionless, angel things. So I don't get the impression Bayonetta is a sadist. I would say that the fact that most of Bayonetta's enemies are inhuman and presumably asexual, and thus immune to sexual manipulation, lends credence to her character; she is not trying to distract or manipulate anybody, she just likes show off.
Bayonetta's sexuality is entirely under her control, and she is allowed to enjoy and revel in it. She seems to enjoy... sharing it, but that's just it, she uses her sexuality for her own enjoyment, as anyone should be allowed to do.
And that is why I think Bayonetta is a positive figure. She fundamentally represents self awareness, honesty, confidence, joy, levity, and yes, her ass simply will not quit; she is aware of this fact, and she does not want it to. Seems like a win-win to me.