This question is interesting because the Gemara begins with this issue "אלהיהם של אלו שונא זימה הוא". But if we read each word of the text we find that the main issue is Idolatry. I will quote a Rashi:
Gemara (Sanhedrin 106a) quote a verse in Hosea (9, 10):
הֵמָּה בָּאוּ בַעַל-פְּעוֹר, וַיִּנָּזְרוּ לַבֹּשֶׁת, וַיִּהְיוּ שִׁקּוּצִים, כְּאָהֳבָם.
but so soon as they came to Baal-peor, they separated themselves unto the shameful thing, and became detestable like that which they loved.
{Be careful to the words, "love" is the word}
Rashi in Gemara:
כאהבם. מתוך תאות אהבתם לזנות היו משוקצים שכופרין בהקב''ה:
This was in consequence of their love of "love", they are becoming disgusting because they disavowed G_d.
So, the power of love is the cause of the hate of sexual immorality. Because love knows no laws, it is very harmful. Truth does not go hand in hand with an uncontrollable behavior.
Here is a Quotation of the Gemara cited in the OP. Sanhedrin 106a from Talmud Bavli
But he should have said, What thy people shall do to this people - R`Abba B`Kahana said: It is as one who, cursing himself, refers his malediction to others.
He [Balaam] said thus to him [Balak].'
The God of these hates lewdness, and they are very partial to linen {allusion to beautiful clothes, link between coquetry and arayot}.
Come, and I will advise thee.
Erect for them tents enclosed by hangings, in which place harlots, old women without, young women within, to sell them linen garments.'
So he erected curtained tents from the snowy mountain [Hermon] as far as Beth ha-Yeshimoth [i.e., right from north to south], and placed harlots in them - old women without, young women within.
And when an Israelite ate, drank, and was merry, and issued forth for a stroll in the market place, the old woman would say to him, 'Dost thou not desire linen garments? ' The old woman offered it at its current value, but the young one for less.
This happened two or three times.
After that she would say to him, 'Thou art now like one of the family {friendship, proximity, familiarity}; sit down and choose for thyself.'
Gourds of Ammonite wine lay near her, and at that time Ammonite and heathen wine had not yet been forbidden.
Said she to him, 'Wouldst thou like to drink a glass of wine? ' Having drunk, [his passion] was inflamed, and he exclaimed to her, 'Yield to me!' Thereupon she brought forth an idol from her bosom and said to him, 'Worship this'! 'But I am a Jew', he protested.'
What does that concern thee? ' she rejoined, 'nothing is required but that thou should uncover thyself' - whilst he did not know that such was its worship.'
Nay', [said she,] 'I will not leave thee ere thou hast denied the Torah of Moses thy teacher,' as it is written, They went into Baal-peor, and separated themselves unto that shame, and their abominations were according as they loved.
The general prohibition to be in relation with non-Jewish women is linked on verses with Avoda Zara, the problem is the last consequence. See Rambam in Isure Bia. You can see also that the problem with non-Jewish women Min hatora are linked to marriage, not to sexual relations.
G_d hate sexual immorality (of the kind of this mentioned in OP) because it leads to Idolatry
