My opinions are mixed. On one hand it's good to see that someone is finally doing something about some of the jerks out there, though at the same time I'm a big believer in free speech and I felt that Blizzard's "online interactions may vary" bit should cover some of this as a warning. I certainly do not want to see the game turn into a police state because some people are doing lewd things. The "T" rating only applying to content Blizzard it self created.
The big problem I see here is pretty much them putting profit ahead of freedom, since arguably their actions are intended to keep the game approchable to the largest potential group of people, however once you start drawing this line one has to wonder how far it's going to go. Right now it's one infamous area on one server, but are we going to see mods start going after people for Tea-bagging or making off color comments in Barrens Chat or public raid channels as various raiders goof off between pulls and while recovering for wipes and such? I don't generally engage in anything outrageous, but at the same time I don't want to have to be actually worrying about what I say above and beyond the chance that someone might put me on their ignore list (as unlikely as that would actually be for me).
I've seen some pretty disgusting emotes over my time playing, including scat, and some Night Elf on cow action (don't ask) I pretty much just ignore it and move on. But going by this article they are concerned about strippers? With no offense to anyone, but the naked night elf lady dancing on top of the Ironforge Auction House mailbox is one of the more iconic things in WoW, and the butt of more than few jokes (which is part of the point).
But then again I don't play on Moonguard, so maybe they take the amount of this stuff to a whole new level.
The bottom line is though that if you want gaming to grow up, and things like MMOs to be taken seriously, you can't be running them for the children. The freedom of an MMO is part of the point (so to speak) and as I am fond of quoting "you can either have freedom or you can have safety", I tend to think that freedom is generally more important.
Of course as I said, not my server, and I haven't been there.