I was actually talking with my wife about that clip earlier. We concluded that an honest response would have been something along these lines:
"The simple fact here is twofold. First, this is what the fantasy genre looks like - women are skimpily dressed. This crosses all segments of the industry, from superheroines in leotards to water nymphs in gauze dresses and mermaids wearing seashell bras. In this regard, we're neither more nor less guilty than anyone else in this industry - our women are scantily clad, but they aren't more scantily clad than women in the majority of other media.
Second - and this is in no way intended to reduce you as an individual - we know that our audience is mostly male, and we have a lot of metrics that show what they respond to. As a business, please understand that we have to design content that is catered to our largest demographics. So while that may - at face - seem sexist, it's kind of the brutal reality of competing for dollars in a world where attention spans are short, and sex sells.
Neither of those things are ideal answers (few honest answers in this world are) - they're just the hard reality of where the rubber meets the road. We know that you're not the only person who takes issue with this, and we're not trying to casually dismiss your views. But the kind of changes you're asking for need to occur on a bigger level than we can, even as a large company, control."
Instead, they chortled, made jokes about 'magazines,' and visibly diminished her with a series of blow-off replies. THAT'S what makes it sexist... not that the content is in the game (because it is in almost all games), but that, when confronted about it, they couldn't treat her like a human being asking a legitimate question in front of a crowd that, in all likelihood, was hostile towards her interests (deep down, I doubt too many of those guys present really wanted the plate bikinis to vanish). She was brave, and they handled it like cowardly imbeciles.