Nintendo`s biggest market is kids, the last thing most parents would want is little timmy asking why ryu and ken are kissing like mummy and daddy do. Also, how will they handle breeding ingame?
These activists are barking up the wrong tree if they think the majority want poofters in kids games.
And where do you stop?, multiple wives are common in some cultures as are child brides and forced partnerships, imagine a game that included that little lot to avoid upsetting the locals.
Nintendo are 100% right for the decision they made, and if the gay crowd dont like it, then tough, dont buy it, go and play arseraiders 5 or whatever floats your boat.