I actually do fall into the pool of opinion that sexual stories are valid stories. Like @saosmash says, I do think that character development can occur during TS. I think that other RP can be spurred by what occurs in sexual situations. It's all part of the human (or alien or robot or mutant) experience.
Where my discomfort comes into it, specifically in regards to NPCs being played by staff, is where it feels there is a barrier to achieving greater RP because NPC access is limited to a chosen few. I have been in that situation before. When you're following the posted rules and guidelines to interact with the world/metaplot/staff/NPCs, presumably jumping the same hoops other players are jumping, and they are leaping into a dynamic tapestry of interactions that spur on their story and you... just are not living the same experience.
That isn't a player issue. The players who are benefiting from their experience, I'm happy that they get that.
But I want that too. Call it jealousy, ok. I feel to name it that is dismissive, and overlooks the underlying issues. With all of their tools staff is creating experiences for people. NPCs are a big part of that toolbox. And people notice when the pattern is radically different experiences for different portions of the playerbase.