Since I wonder about this sort of thing pretty often, I was excited to run into this article from a Church magazine that addresses this very issue. It was written by the former Dean of the College of Humanities at BYU when he was confronted about stories that were being published in student magazines. Some people wanted him to be more strict about what could be published in the magazine, while others wanted him to include whatever the writer felt was appropriate. The whole article is quite long, but there were some sections that I thought were really interesting. It's addressed more to writers, but I think it definitely applies to readers as well.
"Hypocrisy, bigotry, superficiality, sentimentality, pomposity, apathy—wherever such attitudes are found they should be exposed. It is not only a writer’s privilege but also his duty to expose them, and you can’t expose evil or solve problems by turning your back on them or pretending they don’t exist. Moreover, a writer’s realm is the whole of reality, and it is his privilege to explore whatever aspect of it he desires. However, it is also a writer’s privilege to be discriminating and selective, and it is his responsibility not only to reflect the world honestly but also to reflect himself honestly."
"A writer must face problems squarely and describe them honestly, but in doing so there should be no question where the author’s values are."
"I also want it clearly understood that this essay is not to be interpreted as an attack on modern literature. All my life I have studied and for a quarter century have taught modern poetry, the modern short story, and the modern novel; and I have found in them brilliance, excellence, and power of a quality to match the greatness of the past. I am criticizing not modern literature, nor
literature of any particular time, but instead the flotsam and jetsam of literature which surfaces junkily in any and every age—the kind of writing which features crudeness, violence, ensationalism, and clever flippancy for their own sake and which intentionally mocks, ridicules, and negates spiritual values and human dignity."
I guess you can take from that article whatever you'd like, but I take it to mean that there are a few kinds of literature out there . . . there is great literature that contains material that Mormons will probably find below their standards, yet still remains great literature because the overall message to be taken from it is a good, worthwhile one that improves you as a person; there is also literature that is degrading, negative, and base with nothing very uplifting about it at all. I think it's fine to read literature that contains language or sexuality or violence as long as it is, in the end, not lowering you as a person. You can learn from the things that you read, even if what you are learning is, “Wow, that guy made nothing but bad choices, and look where he ended up." But I'll definitely be avoiding literature that is full of such material just for the sake of shock value or "exposing" horrible ways of life or titillation.
Just my thoughts.