Waterhouse was a second generation pre-Raphaelite specialising in pictures of pretty women in historical or mythological settings. In this particular instance the young women are young and naked and trying to get a Greek chappie to join them in a lily pond. I suppose it could be considered mildly titillating- but then so could 40 percent of the contents of any Art Gallery. Western art- when it's not about praising Jesus or admiring the landscape or immortalising the features of some rich and powerful person- is almost entirely about sex- and- specifically- given that most patrons and artists have historically been men- with pandering to the male gaze. As soft-porny pictures go Hylas is on the mild side. A quick online search would turn up much raunchier works by Titian, Rubens, Matisse, Picasso or almost any other master you cared to name. (Even Leonardo and Michelangelo were at it- only their sensibilities were gay). If the City Art Gallery owned paintings by any of these titans (it should be so lucky) it would be an act of suicidal courage to take them down.
Anyway, the Gallery has certainly prompted a conversation- only it's more like a shouting match. People don't like to be told what they can or can't look at and aren't afraid to offend against Godwin's Law whilst saying so. There may well be a debate to be had- post-Weinstein- about the sexual crassness of the western artistic tradition- but what's happening here is a howl against censorship.
Yes, Hylas and the Nymphs may be a bit naff, but, please (only most people aren't saying "please") put it back on the wall and let us make our own minds up.