In my opinion games should have an option for "non-swearing" dialogs, there are usually multiple ways to say things without using "power words". Would I use this option? Most likely not, I can accept that my character will say few dirty words in moment of panic or other situations with "strong emotional state", but having an option to select different type of dialog would not hurt.
If I have to buy few apples from friendly neighbourhood kiosk, I dont really look forward hearing "have a nice ******* day, hope you enjoy those ******* apples, come again, dear ******** customer", unless game theme is balanced towards that type of humor.
About villains, they can be most evil things without using silly dirty words, sometimes lack of strong words (or extreme anger all together) can increase evil factor.
Unnecessary use of anything is most often bad decision.