Is it ethical to sell something that is dependent upon data that people might consider sensitive? Even if they willingly lent their photos to fitness organizations, it's unlikely that they would have predicted that AI would make use of their personal data in the ways it does today.
That said, having considered what you've pointed out about people's expectations when having their data taken not accounting for things like deep learning, I would be hesitant adopting the same attitude if I were working on a product or paid service. Right now I can't lay down a bottom line as to whether I think what you described is ethical, but I do think that the general public should be more informed when it comes to how their data, even old data, could be potentially used.
I have some questions: Have you planned some possible data pipeline to improve the data generation? What about concept validation? I mean, this is really cool and could really improved the users experience in a gym or fitness center.
For this to work, the generated images would need to be already realistic enough. I think one way to "fake it until you make it" would be to interpolate between someone's picture and a fitness model, in the method introduced by the paper "Generative Visual Manipulation on the Natural Image Manifold"
Data augmentation by slightly scaling pixel intensity uniformly across all color channels would be my first idea as to how to counteract this. After that, I would consider regularization by adding a penalty to the cost function that punishes larger differences in average pixel intensity.
Do you think that the L1 regularization used in pix2pix - which is intended to preserve low-frequency spacial patterns in the image pairs - will ultimately end up limiting how well cGANs can learn the body transformation image translation task?
You can see that demo in the facebook live video, or check out the code here: https://github.com/rayheberer/burda_hackday