The main problem is that since it is illegal, there's no easy way to address abuse (victims will not want to talk because they are potentially at risk of being punished). So if VR can reduce the amount of sex workers (less demand -> less supply), it may (?) lead to less cases of abuse. That sounds to me like something Better, but maybe not as Good as some other alternatives.
It's also interesting: why is human connection considered good? People connect because it makes them feel something, but if you could achieve the same result w/o human connection, would it be that much worse? It feels worse to me, but not sure why. :-)
Yes, it feels worse to me as well, but I can't say why, except that it seems fundamentally alienating. But this is subjective. It seems to me connecting to other human beings is part of being human.
People sating their urges with some VR simulation doesn't seem like an improvement to me. It feels alienating, out of a work of dystopian scifi: people no longer even need to touch other people, they engage with simulations. I don't know, it feels terrifying to me.
Someone else mentioned Real Dolls. It made me think of the pretty good and touching movie "Lars and the Real Girl". We like and pity Lars in his delusion that his Real Doll is a real woman, but the character definitely has issues.