Is prostitution immoral? Can we not think of it as a kind of industry where service (i.e., sex) is given and received while both parties involved benefit?

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Even if both parties benefit from the transaction (relative to the baseline where they do not interact), the transaction can still be immoral. An extreme example would be a mother in Cambodia who works as a prostitute to feed her children. She prefers serving the customer and receiving the money over not interacting with him. And he prefers the transaction over not interacting with her (it only costs him as much as he earns in 20 minutes back home). But it may still be immoral to take advantage of the woman's situation by paying her so little.

Let's leave this sort of case aside and consider prostitution involving two people who are both well off and roughly equally well off -- perhaps a business person buying sex from a college student from an affluent family who is saving up to buy a flashier car. In this case, I'd agree that the transaction is not immoral, assuming free and informed consent on both sides ("informed" meaning among other things that neither has failed to disclose any infectious disease to the other).

Still, this sort of relationship is generally not part of the best life that a human being is capable of. Either person might aspire to a more ambitious romantic relationship in which they would share not only sex but also conversation, literature, travel, sports, emotions, and daily joys, curiosities and sorrows. Where these other possibilities are available but passed up in favor of prostitution, people are falling short of their potential in much the same way as they do when they pass up good novels for trashy ones, news analysis for daytime TV, or evening discussions for excessive alcohol. That's not immoral, so long as no one else gets hurt, but it's still ethically questionable in a broad sense of ethics as one can find in the ancients and in Bernard Williams, for example.

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