Re: At what age is it not appropriate?
IMO - it's innapropriate when someone is uncomfortable with it. It doesn't matter why they feel uncomfortable. So if someone is uncomfortable when a child notices gender differences - 'right' or 'wrong' it is time to stop bathing together.
I personally was never comfortable showering with a child (I like super hot showers and was always afraid I'd drop a slippery wet kid) so I've never done it. But if all parties are fine showering together at (insert random age here) then it is fine for them.