I'm pretty sure the use of faries in the new Castlevania is just an excuse to get nudity into the game. Good job asking Bitmob members how they feel on Twitter and incorporating that into the story.

People tend to forget that loathing your body and covering up its shamefulness is largely a product of western culture, of which fairies are not a part. Before that, clothing was a replacement for fur. Think about it, if you could just magic up warmth or whatever, what use would you have for a shirt? Pants, on the other hand, are largely a tactical advancement.

Why would faeries wear clothing in the first place?

Depends. According to much mythical tradition, fairies have been prone to running about with no pants on. For me, there's nothing wrong with a bit of cheesecake in a game, but it really bothers me when it starts to be pointless and unoriginal (a la DOA/Soul Calibur). On the other hand, I loved Bayonetta, which brought sexy to a stupidly awesome level, so much so that it almost ceased to be sexy all together: it was stylish, and quite unlike most of what we had seen before. 

Haven't played Lords of Shadow, but I can safely say that while T&A of the monstrous variety (a la Medusa) is part of the series. Are the fairies appropriate? Maybe, maybe not. I'd have to play to decide. 

Yeah, I forgot that some monsters in Castlevania are topless. I think the Ume plant girls are another example. I've only played the 2D games though so I didn't notice that as much.

You want risque? Go play Deathsmiles and you'll see why it got a T rating for 'Partial Nudity'!

A nice aversion of this trend is in the Touhou games, where fairies such as Cirno are just as fully clothed as the rest of the cast -- and just as adorable(as long as you don't look at the "official" art by the game's creator).