Maybe that's true for public photos; I know of a photographer who frequently snaps shots of wild and crazy college-town happenings and from my inspection, by your rules she should have been canned a few hundred times now.
They'll allow that kind of content only in non-public galleries that are also password protected. It's possible to slip some things through the cracks, but if and when they're found they'll delist the photos.
There's no value for me in paying money for a service which requires I lock up my photographs like Fort Knox merely because they contain skin. Your friend's mileage may vary.
(this is the relevant section from their TOS: "By using any Interactive Areas, you agree not to post, upload to, transmit, distribute, store, create or otherwise publish through the Site any of the following:
Any photograph, video, message, data, information, text, music, sound, graphics, code or other material ("Content") that is unlawful, libelous, defamatory, obscene, pornographic, indecent, lewd, suggestive, harassing, threatening, invasive of privacy or publicity rights, abusive, inflammatory, fraudulent or otherwise objectionable or harmful, including without limitation photographs or other Content containing nudity that would be unacceptable in a public museum where minors visit;")
"I’m afraid if you’re a nude photographer, SmugMug isn’t the place for you. We’re a family safe site, and we will ask you to take down any photos that violate our terms of use."
"Our nudity policy is pretty simple and written in plain English. You can see it in our TOS. The summary line is as follows: “we prohibit the uploading and display of photographs or other Media portraying explicit nudity that would be unacceptable in a public museum where minors visit, for example. If your photos would only be suited for adult sites, adult magazines, or R-rated movies, they are not suitable for Smugmug.”
We do enforce this rule to the best of our ability."
a. User Content that is... obscene, pornographic, indecent, lewd, sexually suggestive... including without limitation Photos, Videos or other User Content containing nudity that would be unacceptable in a public museum where minors visit
nudity that would be unacceptable in a public museum where minors visit
That has got be one of the most stupid 'clarifications' I've ever seen in an EULA. Have these people ever been to a museum? Think of just about any act or scene that is "obscene, pornographic, indecent, lewd, sexually suggestive" and I can guarantee you I can find a photo, painting or sculpture depicting more or less just that hanging proudly on display in some "public museum where minors visit".