Fanservice does not just mean boobs and panties. It’s anything that has nothing to do with the story and is only there to please the fans. An example would be showing a shot of an older character who has nothing to do with this plot, but the fans happen to like. Say, for example, the game Portal showing Black Mesa logos for fans of the Half Life franchise. However, the most common form of fanservice is showing off the assets of the characters in the show. A panty flash here, a shower scene there. You know the drill.
Fanservice has the negative reputation it has, asides from the obnoxious and distracting elements it often holds, is because it’s used as an attempt to disguise the total lack of anything worthwhile beyond the boobs. The problem now is there are those who see any form of attempted titillation is seen as a negative thing by association. The pavlovian response is that, because the camera is currently staring into the dark abyss of a cleavage, it’s just here for fanservice and therefore a bad thing. Quite often it is, but there’s plenty of other times where sexuality is rather important to the scene in question.
Take Bakemonogatari, an anime with a rather keen fascination with the female body (sometimes with female bodies a bit on the young side, but whatever). In episode 3, Senjogahara, our slightly frightening female love interest, goes to the park with Generic Male Lead Araragi. At this stage, there hasn’t been any romantic feelings between the two, but Senjogahara had fallen for him as a result of the first two episodes. The entire episode is basically spent on Senjogahara flirting with Araragi, trying to get him to recognise she likes him and for him to fall for her (at least, the episode was that, until Araragi went off to molest a little girl, but whatever). The camera, in classic Shafty style, swings about Senjogahara’s body, focusing in on little details like the hem of her bra poking out over the top of her dress. But with these fanservicy shots, they’re almost always shot from Araragi’s point of view, normally with a bit of a wobble in the camera. It’s showing that Araragi is noticing how sexy she is, and getting rather uncomfortable when she leans too close.
The cynical side of most of you are probably thinking that this is so the viewer can feel like Senjogahara is looking over you, the loser male viewer, touching yourself as you watch cartoons. But it’s not like the two can’t exist together. That’s precisely the point I’m trying to make. Sexy and sexuality in general is not something that has to exist solely for the purpose of titillating the audience. It can be woven into the story and the themes. You only need to look at Revolutionary Girl Utena to see that in play on a more abstract level. I’m not talking about eroticism for the sake of eroticism. Go to 2-D Teleidoscope, Listless Ink or Girl Cartoons for stuff like that. I’m talking about eroticism for the sake of Story.