The pillows being sold were definitely WAY too small to even be considered in the same category as "sex pillows" or whatever you want to call them. That being said, I still think it's a bit odd to be selling them when the cosplayers were unaware of their existence.
The Loki pillow was the ONLY larger one, but couldn't have been any larger than a small child, from what I could tell. It was NOT being sold, just displayed. I see nothing wrong in that, as the photobooth in the Doubletree has sample prints clearly displayed on THEIR table, and nobody ever complains about THAT. The issue in this, to me at least, is the selling of the smaller pillows and 360Âº prints, not the displaying of them.
As far as the legality goes, we WERE all informed of the release and were asked to sign it if we consented. We were NOT informed, however, that we were being thought of as models, instead of clients, or that our images were going to be sold in any way. All we were told was that the form was to give the photographer permission to post the photos on his site and on Deviantart and to use them in any way he saw fit in order to promote himself (like on a pillow). We were also told that he would never use the photos for something without our permission first. We WERE allowed to read the consent form, but I mean, who has the time to stand there and read all that at a convention? My only problem is that we were told about the uncontroversial part of the contract, and not the part about our likenesses being sold to make a profit. He and the girl who was working for him seemed like very nice people, though, and clearly his intentions were never malicious in any way. He also released a statement today saying that he would no longer be selling the pillows, so this really shouldn't even be an issue anymore. I think he just didn't realize that the cosplayers in question were unaware that he was going to be selling their photos to the public.