I think status quo is, so far, the most healthy approach at the moment. Myself, I always use "effing" in order to not to use "F" word for example.
But then, Nyx also got a point. It shouldn't be disallowed or censored in stories, provided warning about bad language should be given prior such a thing. For me, if swearing is used in system local chat - that is okay. But when someone PMs me insults (provided it's not a friendly chat in which we swear, like on group chat), that's the ooRP hate.