Yea, I wonder about this myself at times. I have one character in one of my books that I know has a bad potty mouth, but instead of filling his dialog with
Bob said, "F-you! you s-o-b! I am going to shove a stick up your a.. till s--- comes out your f'ing nostrils you stupid m-f" (can you tell I grew up in Jersey? LOL)
This does little to advance the plot, but it does show some degree of Bob's character.
Something "What spilled out of Bob's mouth next was the most vile language I have ever heard from an officer...," does essentially the same thing but allows me to keep a broader audience. Its a compromise, but one I am willing to make to keep the character and the language. I avoid using polite curses like "Oh fudge!" (unless it fits the character, which I have yet to write one that it would)
Now if its something like taking a god's name in vain, but it is a god I made up for my story, I just write it in since its not really a curse, even though it is.
If I READ foul language that is there because its part of the character, I am fine with it. I just dislike when people intentionally stick it it to try and prove they are not prudes or something.
So that is how I handle it at least.