In my opinion, there’s two ways to use language like that. Many of your comments are right on. If I have to hear another masturbation joke I’ll scream. That sort of TMI comedy gets old quick.
But when the language is used creatively either as an integral part of the joke or as spices and flavoring (as Carlin said) then I see no problem with it. One thing we’re always told is to be ourselves and be real on stage. If I speak that way in real life, why can’t I do so on stage?
And yeah, you do have to clean it up for TV and such, but that’s five minutes. They also won’t let you discuss religion, gay rights, or any other number of topics. So you can’t base your whole act just on what you can do on Leno.
From the comments here, it seems the argument is more against simple, surface, shock humor than the actual use of the language.