I'm of two minds on this - I don't particularly think that topless bathing is bad, but then again, I don't see a huge difference between your nether regions and yours breasts, in terms of sexuality. They are both sexually charged parts of the body in our society, though their proper functions are for breeding/nursing young children. I could understand a parent not wanting to have to explain public nudity - I think that some people think it will make their child too open with their own bodies, too willing to bare themselves.
Would I go to a topless beach? Maybe.
Would I bring my young children to one? Probably not.
I had an experience where I had my two young neices (four and six at the time) and we stumbled onto a private, nude beach. Naturally they were delighted and started giggling, asking why everyone was naked, and I had to sheperd them away and explain that they were naked because it was private property, and that there was nothing wrong with being naked, but that they had to save it for times it was appropriate.
Personally, I think the problem with public nudity is that it makes it so much harder to distinguish when it's proper to be naked, and when it's not. Afterall, if you're allowed to be naked on a beach with a group of men around you, why is it wrong to do it with one man, behind the school bleachers? A bit of an extreme example, I suppose.
Anyways, personally I see no reason not to allow it, just that there are some legitimate reasons as to why people would be against it. Even if they are a bit exaggerated and fear-mongering, as reasons go.