Sex appeal is alot more about representation of the character than a reflection of them being fighters though.
A female character dressing less than appropriate, showing skin, wearing high heels and having large boobs - none of this has to do with them being fighters. It has to do with them being women. By exaggerating their feminine features, they represent their gender more than anything else, and there are two reasons for that - to look pleasing for the straight male audience which covers the majority of the fighting game community, and to make women appear as beings of strength, independence and femininity to appease the female audience.
From my experience, and from the words of my female friends who are gamers, alot of women want to see themselves be represented in a game as the "normal" type of female character, but they usually go for the hot, sexualized female characters to play as.
As an example: in World of Warcraft, the most played races are the Humans, the Night Elves and the Blood Elves. And most of the female players choose to be one of the elven races. Why? Because of the aesthetics. They are beautiful and sexy creatures. Simple as that. If that wasn't the case, alot more people would play as Orcs, Trolls, Worgen and Dwarves, right?
Fact is... and it's a cliché, I know... but sex sells. And it sells because that is what the majority likes. Both male and female audience. And personally, I think that's alright, as long it is done tastefully. Having all the female characters look like pornstars is NOT tasteful! But that one or two of them lean more to that side, such as Mileena, while others have more respectable designs, such as Cassie, is a nice way to please as many as possible, so people who like either type have something to choose from.
The same goes for the male characters. Some like the more skinny types of characters who are dressed in robes, such as Ermac, while others like the bare-chested buff characters, such as Reiko. And it's cool that we have that to choose from, instead of having ALL characters just be ONE type of character.
Diversity and variation is the spice of life, after all.
