>>718304581
1) Largely speaking, Japanese developers of B tier or lower can still and do still design character like that. It's only the bigger ones that don't because in chasing larger profits they want to lower the amount of "weird anime moments" that happen in their games, chasing audiences larger than the one they have. The industry is ran by money people now and not creatives that enjoy elevated positions in the company due to past creative accolades.
2) People, especially women tended to pay a lot less attention to games, so if something came out that was "objectifying" the only people who would see it are people who like that sort of thing.
3) This type of game has migrated to gacha games because it's a much more consistent method of fleecing the same audience. The way they used to do it was by selling you over-expensive special editions of games and trying to sell you expensive plastic. Nowadays, people can paypig for their waifus not with dakimakuras or prize figures but by gambling to even obtain them to begin with.