You can’t just read everything More describes in Utopia as a serious program for a Christian society. For one thing, the Utopians are not Christians but live according to natural law. For another, there are heavy elements of satire in the book and More distances himself from Hythloday by having Hythloday describe his trip to Utopia to “More” (the narrator of the frame story), who is rather skeptical about certain things (and even Hythloday thinks that the custom you mention is a silly one). Furthermore, the word “Hythloday” means “speaker of nonsense.” So scholars debate endlessly just what More’s intentions were in this book and which aspects of Utopia he really regarded as ideal. (Note that the word “utopia” when More originally coined it didn’t actually mean “ideal society” but “nowhere”–it’s a fantasy world which may or may not be regarded by More as genuinely ideal in all respects.)
Clearly More is trying to get us to think about how a society based on natural law would treat sex and marriage. His Utopians disapprove of premarital sex and punish it harshly (by forbidding the offenders ever to marry). I think that More is pushing his readers to distinguish between their conventional horror at the idea of unmarried people seeing each other naked and the real question of how a society is to promote stable, faithful, and happy marriages. He probably isn’t really suggesting that European societies should imitate this particular custom, but I suspect that he is trying to overcome our confusion between convention and virtue–a confusion which has caused immense damage in the past century, as many folks in our society have thrown off virtue along with convention. But that’s just my guess based in part on my own concerns with the society in which I live.
Edwin