SL isn't all that bad, its making money hand over fist for not just indy content designers like me, but for Linden Labs as well, and whats more its spawning all kinds of social networking based games/clients behind it.
SL is by far, at this time, the top of the heap, but there are others out there too coming up or going down depending. But one that I think you'll find that is even more desperate than SL can seem sex wise is http://www.redlightcenter.com, which is COMPLETLY based around virtual online sex, has no user generated content that I'm aware of and basically people can play for free there but to have an apartment and get better sex animations you have to pay from what I understand...and from the screenshots I've seen of it the design work is well below even MY level of skill...and...oh...they're making TONS of money irregardless.