I agree with everything the guys have written above. It was good to see that everyone has something important to add to the subject.
I don't see it as a big deal though. I am sure that it can pose a few challenges, such as galleries or exhibition spaces being reluctant to host a subject with "homosexual overtones" or finding a model to pose, but even them are relatively minor, able to overcome and depend much on your geography, not a general attitude.
In the end its really in the eye of the beholder and one sees their own reflection in an artwork and an artist shouldn't let other's opinion stop him/her from creating or exhibiting, even though (s)he should care about them at the same time. I am always glad to hear people's opinion on my work, especially if they tell me something new, but I don't really care if they like it or not (unless they are paying for it).
When it comes to sexuality though, I think an artist has to have a connection with the subject (any subject) and visual carnal attraction is a very legit connection. One is always attracted to their subjects for a reason. They might be beautiful, or ugly, or just interesting and strange, but it is an attraction and a connection nevertheless.
My own eyes are for example attracted by beautiful male faces, dress or bodies. I find myself often turning to look at a handsome or well dressed man and stare at their pleasing features. I am honestly also mesmerized by a dancer's muscular body or other natural-looking physiques (body building I find unpleasant and unnatural). I also can feel their sexuality and attractiveness from their eyes, attitude or build. Yet, even though I will be jealous of their bodies, style or handsomeness, I have realized that it is the attraction of a visual artist and a human sensitive to beauty and not of necessarily of actual homosexual attraction and that is something I thing that the vast majority of people wouldn't understand. A common person, as Jason mentioned is hardwired to sexual attraction above pure visual (or other) pleasure and can't see a difference. Yet a beautiful human is attractive, both artistically and carnally and that's ok, even at the "highest level of Art", but the point is to be able to understand both and not exclude one or the other.
If you exclude sexuality from a nude human (which like I wrote is perfectly ok even if the subject isn't your type) or exclude artistry, then it becomes stale, dull and serves one single master, either the head or the groin, but both become pornography. Non passionate, clinical "artistic nudes" are intellectual pornography and quite boring unless its your fetish. Let us not forget after all that sexuality exists everywhere not unlike beauty. Don't tell me that a beautiful landscape, derelict building or interesting object has never brought thoughts of wild copulation inspired by it.