As for the gambling atmosphere, let me make an analogy to poker.
Have you ever played poker for no money? Playing poker just for the cards is boring, because there's no way to bluff or use actual skill in the game; it just comes down to luck.
Use chips without using actual money and you introduce a new element: Scarcity. Scarcity pushes people to choose whether it's 'worth it' to keep playing, and skill starts being involved and the quality of game and the interest in the game go up. Now it's not just about what cards you get, but what you can do with them. There is still, however, limited liability as you're not actually losing anything when you lose chips. If you run out, you either sit out for the rest of the night, or the other players let you take a new pile of chips so you can keep playing; there is no real risk.
Make those chips represent actual cash value and you reach the true game of poker. It's hard to throw chips around willy-nilly if it means throwing around your own hard-earned cash. Every bet, every hand, is determined by the value one puts in his or her own property, and the risk they are willing to take with it. Poker is not pure 'gambling,' but a game that necessitates some level of risk to achieve maximum play level. It is a game of strategy, tactics, bluffs, and risk analysis.
Diplomacy is in a similar vein. This site allows the better players to advance in status by earning their keep, so to speak. You can restrict games to dedicated players by requiring a higher buy-in. I haven't played particularly many games on this site, so I only have that starting 100

(as you can never have fewer than 100

including points in play. This means you can never 'lose out' of the site), almost all of which are in play at the moment. Strat, however, has 2777

at time of writing, and that's not including the ones in play, however many that may be. Clearly he puts a lot of energy into playing here, and is quite successful at it.
The betting system here is merely a way of restricting by level of play, and allowing people to match up with those of similar play level (once they get up to the level they deserve to be).
I tried a game at PLAYDiplomacy, and did not enjoy it. I liked the interface, I liked some of the players in my game, but I hated that I couldn't play an anonymous game and that there was no way to 'ready up' and advance faster if everyone was playing unless a specific option was set in the game. It meant that I would just forget about the game until it advanced, at which point I would have to figure out what was happening in it again, as the build phase was set to 5 days for some strange reason (orders phases were 2 days), and it waited all 5 days no matter what.
Also, swears are a means of communication. They express frustration, emphasis, and emotion. If you are so bothered by them, don't use them. You will come across as more polite (assuming you're not actively trolling, *ahem* ). If you can't handle a group of people swearing, that is your own problem, and just shows your own immaturity. The level of profanity on this site is not 'dangerous' in any way, it is merely accepted.
In conclusion, please return to your own home under that bridge where you can continue stroking your own ego and telling yourself how much better you are than us 'elitists.'