Some kind of real privacy in SL, by whatever means, elegantly solves two problems at once.
Privacy itself is only the obvious half of this. The other half is the whole snafu over "broadly offensive." In most cases, the content most likely to trigger a reaction that it's "offensive" can be put in a space that is private, with a clear warning at the gate that if you don't want to see it, don't go there... you will never accidentally see something hardcore that you didn't ask for by entering.
Many problems are solved at once by privacy, just as they are in RL. In RL, we can go into a room no one can camera into, before we rezz our animation balls, LOL.