If the design is well done, it makes it more tolerable. I can even appreciate a sexualized female design, because the human body can be beautiful and design can take advantage of that. But I don't know if it's "okay." I personally believe the ubiquity of highly sexualized female designs contributes to/is born from the implicit understanding that the world is for (straight) men and everyone else is just visiting.
But I don't have a problem with Chun Li and I agree with your description of Cidney. I'm tired of "garish" designs. Even if I try to ignore how silly a design looks, it feels harder and harder to ignore when the camera demands their attention. More than the designs themselves, the way the characters are modeled and treated in game can be a problem. A lot of the designs for Sen no Kiseki III looked pretty good on paper, but in game they looked silly, because of the way they were modeled and the inclusion of boob physics. All of this in a game that demanded to be taken very seriously.