Second Life IS a Red Light District.
I played for about a week in 2006, in which time I encountered scuzzy realtors incessantly bugging me about selling my property, a dancer at a club who offered to give me a private room and showing if I paid for it (because her "daddy" told "her" to), and a random dominant/submissive pair in dungeon leathers who stopped to chat pleasantly as the guy spanked the girl's ass repeatedly.
SL is definitely innovative, but I'm not sure I want my MMO experience to so accurately imitate one of the slums of Amsterdam.
Plus, I have to admit I was a bit surprised to find out that the sleazy-real-estate boom had extented so far that even virtual realtors were going door to door trying to get you to sell your land so they could flip it. 2006 was right around the height of the subprime bubble. I wonder if keeping a legal exchange rate for the dollar exposes Second Life to real fallout from real-world financial crises.