This post over at Language Log is a good follow-up to gaetanus' Law of Vulgarization below. Apparently, avoiding using certain words isn't enough; we must now avoid using words that remind us of said vulgarities. This reminds me of the last dog I had, and oddly, I think it happens to people, too. It used to be that after a while of saying, "Do you want a bone?" our dog learned what that meant. But if my mom wanted to ask me if we had any more bones, he would hear the word bone and get excited. So we started to spell it: b-o-n-e. Then he picked up on that, so we would spell it backwards: e-n-o-b. He learned that too. In fact, he got so good at knowing what sounds were usually associated with either getting a bone or going outside that we literally couldn't ask each other questions starting with "Do you want..." without him getting excited.
Relevance to language: This same seems to happen with taboo words: Familiarity breeds contempt. If we start using a euphemism long enough, it becomes just as associated with its referent as the word we're avoiding, and then that word becomes taboo, and we must use another one...until that one gets "contaminated" (to use Language Log's term). It seems like society has a built-in need to have words you shouldn't say (in situations the slightest bit formal at least), and if one word is avoided successfully enough--too successfully--by the majority of society, or by the right caste of society--there becomes a need to stigmatize whatever has become the euphemism. Usually it's because we need a way of talking about unpleasant things without "rubbing our noses in it", to use another dog analogy. If a euphemism becomes so familiar that it ceases to remind us of another word, but of the concept itself, it has lost its usefulness, and now itself requires a euphemism.
Now the Aristotelian mean seems to lie between the two extremes of being too willing to offend sensibilities by using taboo words, and forgetting or misunderstanding the reason for euphemisms in the first place, and that language is ultimately an arbitrary human convention, and not being able to tolerate even harmless "winking" by people who have the stomach to acknowledge what euphemisms are in the end: a linguistic work-around for a human weakness.
(I have a friend, definitely of the "winking" type, whose bathroom door is adorned with a pretty little sign labelled, "The Euphemism".)