Rumours are that the increasing size of Powergirl's chest is pretty much an in-joke on the creators and editors side of things... is there currently some sort of similar in-joke for Nightwing and the frequency in which his butt is shown?

I am not really aware of the Powergirl joke, to be honest. Not sure if that's true or an urban legend. But as for Nightwing's butt, I think it's perfectly okay to have a guy who functions as a great character AND a lovely bit of eye candy. Lord knows there are enough female characters who have been treated that way for decades.