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I am anti-censorship on general principle although I thought the story Harlan Ellison tells about trying to get comics to pull bee-bee gun ads was pretty funny. (Recently reprinted in the Comics Journal Library).
As for that image, no idea, never seen it or heard the controversy. It's hard to judge comics nowadays anyhow. Back in the old days when the genre was clearly aimed at children and young adults, I think the industry was right to limit the graphicness of violence and sexuality.
Nowadays, however, do kids even buy comics? They're mostly fighting over a market of thirty-year olds and a spattering of teens. Given my own views on this audience (not a particularly flattering one) I think graphic violence and the like is what draws them in. Limiting it, from a market perspective, would be suicidal.
On top of that, even if we do assume young people are the principle audience, it's hard to see how anything in comics is much worse then what they now see daily through TV, film, and music videos.
So...no, comics can't really afford to be the only industry with high standards.
PS - I think you're wrong about Marvel being "naivete" back then or somehow less savvy then it is today. The Marvel of that era was much more of a thriving business then it is now. They sold far more books and wrote for a larger audience. Covers have always been about grabbing readers attention.
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I didn't mean to suggest Marvel as a business was simpler than Marvel is today - although I really think it must have been. I'm sure times were easier back in the 60s and 70s and cut throat competition of the kind found today didn't exist. Look at old movies - often a whole load of time is 'wasted' on not much happening, films used to meander a little (both to the good). Now its all hype and explosives. It really feels dog eat dog.
What I was trying to say about the simplicity of comics in that era is that the stories were rarely complicated or very surprising (but sometimes they were). The art was basic, in my opinion, though it did the job. If you showed someone a book from the 60s and one from today I bet anyone could tell which was modern. I've always wondered how Marvel's 60s heroes have been the best received in the last 50 years. I guess the idea was the thing rather than the execution.