Yet another one of these stories. I remember when I first heard about such things some years back on the old controversial blog The Misanthropic Bitch. In particular, this article (courtesy of an archive of the site) applies. (The article even references a Supreme Court case that is very important to those of us in the US who play eroge.)
Lastly, I completely agree with you Narg: the solution isn’t “WE NEED MOAR BIBLE!!!” as you put it. Morality doesn’t come from a book. All indications point to morality primarily coming from the example of parents. If parents aren’t there to set a good example, then children will piece together their own version from the influences of all other sources. If morality really did come from the bible, then we would have all sorts of people being stoned in the streets. Kind of like how it is in some countries in the middle east.