The Witch-king of Angmar in Tolkien's Lord of the Ring trilogy was thought to be unkillable, because of a prophecy stating that “not by the hand of man shall he fall”. He was eventually killed during the battle on the Pelennor Fields by Eowyn, who by being a woman deftly sidestepped the prophecy. Nobody had thought of that, because women weren't a regular feature on Middle-Earth's battlefields. Eowyn was a big exception and only got only the battlefield in disguise. What *was* a regular feature of Lord of the Ring battles is that they were racially motivated. Except for the humans, who fought on both sides, you could tell on which side a character was fighting by simply looking at his race: Elves, dwarves, and hobbits on the good side, orcs and goblins on the evil side. By modern standards the world of Middle-Earth is definitely sexist as well as racist. The online version of LotRO is still racist, but as you can't play an evil race except temporarily most people don't notice. And LotRO isn't sexist at all, there is absolutely no difference between male and female characters in this game. Same with World of Warcraft, race determines which side you are fighting on, while sex is irrelevant.
Now a discussion has broken out about Age of Conan, which is more sexist than WoW or LotRO, having female characters start as sex slaves. And thus Age of Conan also deals with the subject of slavery, which other games tend to avoid. Although slaves were historically a dominant feature of ancient Rome, as well as one of the more frequent "cargos" during the age of sail, you won't see any slaves in Gods & Heroes, or any of the many pirate MMORPGs like Pirates of the Burning Sea. Age of Conan also is mentioned in the news because it contains sex (apparently not graphically depicted, but with a buff as consequence). Most other MMORPGs are sex-less. Yes, people can do pretend cyber-sex. But that is something that mainly happens in the head of the people pretending to do those sexual acts. If you look at it you'll notice that in a game like WoW it isn't even technically possible to get nude, nor to show a nipple.
Fact is that most MMORPGs adhere strictly to a 21st century set of values, most frequently based on US moral standards. Thus showing a swastika is okay, but showing a tit or a slave is not. In European countries the swastika would be more problematic, but nudity or slavery less so. And of course these moral standards have evolved very much during history of mankind. Voting rights for women are not yet a century old, the civil rights movement less than 50 years. Homosexuality was considered acceptable in ancient Greece, was punishable by death during some periods of history, and has by now landed in some uncomfortable position somewhere between legal and morally acceptable.
All this is a problem for the lore of MMORPGs. These games often play in other worlds, or other regions of this world, and often in pre-industrial settings. As far as they have historic or literary sources, in the source material the environment is often not conform to modern political correctness standards. Thus you have to choose between staying true to the lore, or staying true to 21st century moral standards. Turbine seriously discussed not to put pipe-weed into LotRO, because some overly correct people didn't want to encourage smoking; they ended with putting it in but having no game effect. For the same reason alcohol in MMORPGs is either not present at all, or has only negative effects. So I don't blame Funcom for making Age of Conan more controversial. Do we really want a Conan the not-so-barbarian who is a teetotaller and always polite to women? Yes, the mature rating is going to hurt their sales with children and women. But not all games need to have a Toontown-like degree of being wholesome for all the family.
It is even worse with historical games. I have the greates respect for the civil rights movement, but is erasing all mention of slave trade from a game playing in the Caribbean in the 18th century or ancient Rome really the best way to treat history? It somehow reminds me of George Orwell's 1984, where the history is constantly rewritten to reflect current thinking. Me, I would think that rewriting history to not mention the slave trade is equivalent to holocaust denial, which happens to still be a crime in several European countries. It is the wrongs of the past that lead to the moral values of today, and forgetting about these wrongs makes today's values less self-evident. It is better to include these wrongs in historic games, and show them as wrong, than to pretend they never happened.