I've been wondering about how this thread got so big. I think some of the arguments miss the point, so here's what I think about it:
TL:DR:
This comes down to "realism" vs "artistic license". Neither is fundamentally better than the other, but the higher the amount of artistic license used, the higher the threshold of suspension of disbelief becomes, until we end up with a story that doesn't take itself seriously or is unintentionally funny trying to be taken seriously. Since "sexy" and "armor" is a contradiction in terms, necessitating an extreme amount of artistic license, "sexy armor" can singlehandedly make a serious story turn silly, and you can't expect developers to compromise the integrity of their setting for the sake of player choice.
Now for the details.
I. The viewpoint of in-world realism
(1) "Revealing" and "armor" is a contradiction in terms.
Why? Well, because the very point of armor is to have something between your skin and the enemy's weapon. Those who answer this with "Enchantment!" miss the point, because unless there isn't an intrinsic disadvantage in adding another layer of protection, and unless the protection offered by your enchantment is absolute, it is always desirable to add another layer of protection, and even a silk shirt offers significantly more protection than no silk shirt, at is can protect against side effects like flying gravel (or bone) and prevent some glancing hits from piercing your skin - which, as an aside, also serves well to protect your sex appeal if you have any. As a rule, scars are ugly.
This means that no sane person who expects a fight and has the time to prepare would ever go into a fight without having as much of their skins covered as they can practically get away with. If circumstances limit your armor, the very least you will still do is cover the torso completely, since you *really* don't want to get wounded there.
Meanwhile on the side of sex appeal, this usually works by revealing exactly those parts of your body you would want to protect most in a fight. This is no accident, since one of the messages inextricably bound up with sex appeal is a measure of vulnerability and trust, exactly what you don't want, or have, in a fight. The other possible message is supreme confidence, which is why deities and superpowered mages can get away with revealing armor in an otherwise serious story while others usually can't.
(2) So what about these JRPGs? Are they all silly?
I have no idea, since I don't know many. But take a hypothetical situation that I'm sure has occurred somewhere in the genre more than once: a young girl is snagged away from a party by some supernatural horror and ends up fighting for her life with newly-revealed awesome psi abilities. In such a situation, a revealing outfit is perfectly plausible. The point, however, is that it's not armor and it's not supposed to be. She isn't wearing "sexy enchanted armor", she is situationally unarmored, and most undesirably so, at least from her own point of view. If, later in the story, she ends up seeking out those supernatural horrors to fight them, and still wears the same outfit, then things have become problematic.
(3) The pitfalls of adornments
Everyone wants to look good, right? Even while fighting? Well, as a rule, yes of course. The problem is that most forms of adornment have significant side effects in a battle situation, and since your armor is made to protect the most valuable thing you have - your life - it's usually seen as being not worth it. Bright colors attract an enemy's attention, embossments, spikes etc.. can snag a weapon, making sure that blows that would've otherwise have glanced off transfer their complete kinetic energy to your body. And so on. That's why most armor has flat or rounded surfaces with no embossments. Camouflage isn't that much of an issue if you already have metal armor, so paint jobs might be accepable in low-tech settings, but they will have the problem that they're damaged in the fighting. So, most ways of enhancing the appearance of your armor are impractical for fighting. I've heard that many female soldiers in modern armies take special care to appear feminine (which does not equal revealing btw) when they can, but they do that in their free time, and they do it exactly because they can't while on active duty.
(4) Fantasy and in-world realism
I can already see the reply: "We have magic, how realistic is that?" Realism is measured by the rules of the fictional universe. It's in-world realism I'm speaking of. Magic is a premise of some fictional worlds, thus its existence is by definition realistic. That's why this story is fantasy. But as much as the presence of magic turns a story into fantasy, the presence of revealing armor turns the story into a non-serious one.
II. The Artistic license viewpoint
All that's good and well, but in fantastic stories we want to look good, because, well what's the point of being in a fantastic world without some acceptable breaks from reality, right? Artistic license is always used in stories, and often we don't even realize how much, leading to things like "reality is unrealistic". There is, by its very nature, no objective way to judge how much a particular instance of artistic license affects the mood of a setting, but there's one rule: the more artistic license is used, and the more "in your face" it is, the less convincing and serious the setting will appear, and the more unrealistic a particular instance is, the bigger the effect it will have.
That's why "sexy armor" on your characters in an otherwise serious story *is* bad design as a rule. It flies in the face of realism much more drastically than, say, embossments, bright colors and the fact that we never have muddy boots, and it is, by its nature, drastically "in your face". Both effects combine so that the amount of rationalization and ultra-tech/magic you have to invest to make it plausible is so ridiculously high that it's immediately recognized as contrived. Revealing armor yells "don't take me seriously" about as loudly as it's possible to yell for a visual element of a story.
So, yeah, I do want artistic license. i don't want to have muddy boots, I don't want wounds to leave disfiguring scars, I don't want to scrub the gore off my armor before I go to rest in a camp, and i don't want to mend my clothing after a fight or repair the damaged griffon embossment on my armor. The thing, however, is this: fighting in these games already uses up a great deal of artistic license to be enjoyable in a game at all, rather than showing us how ugly, bloody, dirty and altogether unpleasant it really should be. Most of these things don't affect the serious tone of the story much because they make the unpleasant less conspicuous, rather than adding something extremely conspicuous to the setting. The absence of muddy boots isn't "in your face" while Varric's backflips very much are. I don't know about others, but I find DAI's combat animations very problematic in this regard. Nobody believes that Varric could really move in such a way, or that mages would flourish their staffs in the way they're shown, just as nobody believes that anyone actually would go into a fight in sexy armor, even if were somewhat feasible to do so.
III. The ruling principle should be "dress for the occasion"
So, here's what I want: I want my Inquisitor to wear a frilly dress to the Orlesian ball. It can be as revealing as I can get away with while still staying stylistically in Thedas. If the game lets me cause a scandal with it, great. While going out to hunt demons, however, I want something practical and protective. And since in a visual medium, function is brought across to the player by appearance, it should look the part.
Edit:
About the above images: these look great, but should count as "dress uniform". Dress uniforms have been invented exactly because "combat outfit" and "representation" are somewhat mutually exclusive. Personally, I would accept them in a story because - see above - we all want to look good and are prepared to sacrifice *some* realism for it. Also note how they all cover the torso completely.