You also need to realize that some ability interact with gender, such as wind main talent, playboy sasuke, mei, jiraya etc. Therefore, gender is not just cosmetic.

Im aware of that, as Mei( one of the ninja for the water team I have in mind ) gives males an extra boost, where as Chojuro gets more attack per water as well. I know certain ninjas have that certain correlation like playboy sasuke and all that but incorporating this allows you to work with them just as well based on how you'd like to use them.

You should also keep in mind that Oasis bases their Naruto Online set-up on the German server as well as the original. This means that they follow a similar time line when implementing new items to the game. If you look at the other country servers, there is no gender selection available. IF Oasis did choose to implement a gender selection set-up, it would likely be YEARS before it was done. Also, I believe if I remember correctly all mains and their jutsu were chosen and designed by Kishimoto. I would therefore assume that major alterations (i.e. gender change) would have to be approved by the man himself.

At first this was a dumb Idea but then I thought what if the male water main had one of the Hidden Mist swords how cool would that be?

No, you either play as Earth or LM if you want to be male

Guys as cool it could have been having gender counterparts u can easily see the china version of the game and no one ia planning that...though if they made those 5 characters..this game would have been more unique and plus their counterparts would have at least 5-6 different skills than our current avatars...the idea to make the same character as female and male respectfully is amazing but I guess thats not a plan for the makers of naruto online.