Because as many people have said already, with stuff like this there has always been abuse or claims of abuse. And in such situations, it doesn't matter that most of the people won't be looking at avatars - action would have to be taken to remove abusive avatars.

Additionally, although we can make rules about what is and isn't appropriate, there are always going to be those who will ignore them and the system would always be reactive, with more than 100 000 people registered. And there is going to be a massive grey area as well - so for example, poster A has an avatar which poster B claims is a direct attack on them.... it would happen! Who has to decide if poster A was actually attacking poster B or poster B was being over sensitive or looking for trouble where there was no intent? As birdstrike says, we are a pretty creative lot and we would probably have both situations occurring.

Additionally, what is work appropriate in some areas/regions/countries may not be in others - look at the reaction to Janet Jackson's "wardrobe malfunction" in the US as an example, whereas many other parts of the globe have more explicit tv ads! Or, someone puts up something which may be distasteful or insulting to a group of posters - for example, many Americans revere the US flag, and would be insulted if it were to be insulted - but for most non-Americans, it's just a flag, nothing more, nothing less and has no special meaning to us so deserves no special protection.

I think you are looking at this question through the rosy tinted spectacles of you thinking it's a good idea, when you have never seen what goes in OMNI, or seen any of the furore which has been generated previously when systems have been abused.