This has been discussed ad nauseam on FlyerTalk, e.g.:
http://www.flyertalk.com/forum/showthread.php?t=313030

Personally, I don't see the problem. They were clearly making an effort to keep others from seeing it (they covered up the screen when you walked by, as you mentioned, making you go out of your way to sneak a peek).

If they made you sit down and watch, that might be another issue. But I'd be upset about that regardless of what the content was.

People are offended by all kinds of stuff. It's not up to third-party pax or the crew to approve everyone's DVDs, magazines and books before the owner is allowed to consume it. Americans have their panties in way too much of a bunch over porn. There's a lot of printed material that I'd be more offended by than the human body (even girls' bodies(!) ).

I wonder what the FA said to these guys. If the FA comes over and demands that I hand over my property, he or she had better have a good reason for doing so -- and a good reason is not "someone a dozen rows ahead of you doesn't want you to have it."