quilled:

They were designed to look less realistic so they would be more acceptable to the public, and also because many toys were modeled after certain Japanese versions, where 'real' looking toys were a cultural taboo.

Actually, as far as I understand, it's illegal in Japan to manufacture or sell a naughty toy that looks like, ahem, anatomy. So they make the toys look like something else - often like something with a face on it which is, yes, a bit creepy.