I'm sorry you have had problems in this area.
I think I have a pretty good balance going on.
My own mom made me feel REALLY weird about anything related to body parts or sex or nudity. I have friends who can't use tampons b/c they are terrified to touch their private parts. So I know - from personal experience, and from seeing it firsthand - that you can totally screw someone up in this regard if you are not careful.
I certainly am not advocating never letting kids explore their bodies or ask questions. We use proper terms for body parts. My 6 y/o is very open in asking tons of detailed questions....
Personally, I don't allow masturbation. I think the pleasure that comes from that is designed to be enjoyed in the marriage arrangement. That does NOT mean that I punish kids for doing it. That would be ridiculous, as they have no idea what sex is yet, and it's totally beyond their grasp to understand such a thing.
But I do redirect and discourage it.
Exploratory touching/looking IMO is different from touching for the pleasurable aspect. And that is something that happens during baths, or while changing clothes - times when the kids know they are allowed to be naked, in the privacy of their rooms/bathroom. (I frequently get "Moooooom! Can you come here! I need to have a private talk with you! ..... What's THIS?!" from my 6 y/o when she is changing clothes or bathing. And that is totally fine.) Maybe I didn't say that clearly or very well in my post. Maybe it would not have mattered even if I did. I dunno.
I realize others feel differently. That is ok. I think we have a good balance going on here. I certainly understand this is a difficult thing to handle perfectly, it's a delicate subject, and a fine line to walk. But I think I'm doing alright so far... Though I do *sincerely* appreciate your thoughts/wisdom.