To be honest I think that it is neither good, nor bad. I am fairly indifferent to the whole thing generally.
I understand that what they are doing is trying to protect their brand and target market, and provide a basis of what is and what is not d20 (OGL still applies to any material).
Its quite easy to misread what they said, as saying you can't do such and you must do this, but what they are projecting is that certain views, images and opinions will not be acceptable.
That said I do not agree with censorship of the written word or art, provided it falls within the bounderies of legality (ie no children etc..)
With the minority groups, what it actually said is that you cannot refer to them as inferior, not that you can't refer to them. That doesn't prevent you presenting a case where such a group are considered to be wrongly inferior to a society as a source of empowerment to the aforemention said group - Infact I'd imagine that would be more than welcome.
For example - The Mentally Ill - As a member of this group, possibly the most stigmatised (trust me on this) group in society, I applude them for identifying with the way in which minority groups are treated in general. We are people after all, though we are often treated as nothing more than our illness and heavily patronised and oppressed through language. Everytime I hear some one refering to themselves or something as crazy, a nutter or mad in a comical way it is offensive, as that person is, deliberately or not, is making light of a illness or disorder they can't possibly understand. Quite often we are portrayed as chaotic, dangerous individuals, who have not self control or sense of right. Which is actually quite untrue, you are statistically more likely to be killed or hurt by someone who is not mentally ill, than someone who is (we are however much more of a threat to ourselves).
As for art, well its tricky subject, but art produced for a game is different from art produced for the art markets. Do we really need fantasy art laiden with nudity, female nipples etc... Does anyone actually buy a product because of this, probably not, theres a wide range of magazines that cater for such a thing, and they are much cheaper. Personally I don't think such a thing is so bad, but I understand that many women are not keen on seeing their gender presented in such a way.
Ok censorship is often a forced sensibility, but then most people don't seem to think about what they do or say, in relation to others.
With regards to religeon, a subject I really don't care about, certain religeous views are most certainly sterotyped in RPGs. There is technically no such thing as Christian, its a term that was coined by Roman Orthodoxy to refer to any accpeted worship of Christ. So it covers everything from the right wing militant fundermentalist right through to the extremely pacifistic Qakers. So why do we always see an Inquistional view and persicution of Wiccans et al. The 'Church' was, and still is, primarily a philospohical leaning organisation, responcible for the introduction of the sciences to the west (Gallilao's heresy was denial of god, not that the earth revolved around the sun - a theory first postulated by the Jesuits incidently).
Largely I see what WizOCoast have introduced as a 'Same Rule Apply' philosophy - If you have a minority, then you must empower them, if you have a religeous view, then you may not slander other views.
Which is strictly speak, something we should have all learnt to do a long time ago. Live and let live, to understand others and see in each of us the human, not the label we hold in our heads.
Ok Rant over.