I don't think kids should ever be ENCOURAGED to swear, but I do think some space needs to be made to allow for an occasional curse word. As a middle school teacher I had to figure out how to handle this question with my students in a way that would be appropriate for the classroom and allow room for kids from a variety of backgrounds coming from a variety of expectations in the home. I have found the answer I used with them to suit very nicely at home with my own child as well. I always told my students they would sound more intelligent and have more success if they used a wide-ranging vocabulary and used it in a precise manner.
They were always surprised to hear me say, "Profanity actually has its place or it wouldn't exist." the less surprising part was what I said next, "However, profanity when used frequently or in the wrong context actually makes a person look less intelligent." The kids knew I saw my job as one to help them prepare for a career.
What this boiled down to with my kids was, if you've hurt yourself so badly you may need the paramedics I will overlook the use of an explicative. If you are using these words in places where no word at all is needed or where a different word is better suited, I will make sure to educate you about the multitude of better vocabulary options available to you (which meant a detention getting cozy with the dictionary figuring out alternative words that would have been MORE powerful replacements for their chosen word - usually took them about 15 minutes to come up with a satisfactory list).
The first or second time there was a slip, I just gave a warning, but if students (or my child) started regularly using profanity or used it as a form of "name calling" then I certainly require a list of other, more meaningful words to choose from. The words should express the idea she want to express in a more constructive way.
Even at six, my daughter knows that is essentially my attitude about these "bad words", and understands and uses her vocabulary appropriately to match (in other words, at this point she doesn't curse or swear).
I guess I'd recommend a similar tact. Wait until it comes up. Then, for the most part, don't allow swearing (with a reasoned and calm explanation, not an out and out ban), but overlook it occasionally as the situation indicates. The reason my six-year-old knows any of this, is that she has seen me interacting with teens, not that I explicititly said anything about it at some pre-determined age.