There's a market for capsuleer prostitution. People do pay apparently hilarious sums of ISK for a night with a capsuleer, regardless of their ability to buy a little sex-paradise for 10 million ISK. It is, thus a fact and a lucrative business for those getting the ISKies. vOv
Other than acknowledging the fact, Nico would be little shaken to see a Gallentean hire him- or herself out like that. Gallenteans do that. Of course it's undignified and unrefined, but that's Gallenteans for you. Other than that, what happens behind closed doors between consenting adults is a matter between the two, whether exchange of bodily fluids or money is involved or not. What happens between closed doors is meant to stay behind closed doors, of course.
I agree with Makkal wholeheartedly when she says that she sees Amarr not as being anti-sex, but as being anti-public display of sex.
Slaves aren't there to fulfill the bodily desires of their holders or betters. Actually, it's the other way around: The holders are there for the slave, their spiritual enlightenment. Holders who invert this relationship fail in their duty towards God. Breeding sex slaves is therefore anathema.
The argument going with 'avoid mixing blood with inferior races' isn't a theologically valid standpoint, if you believe Nico, by the way. It's a standpoint of ignorance putting blood over ethics, morals and dedication to God and something dangerously close to the heresy Sabikism. God isn't interested in race or blood, but what is in the people's hearts and minds and their actions.