This is one of those controversies that makes my fanboy soul scream.
You're right: IMHO, Tarantula isn't the self-insert here.
Nightwing is.
This is Devin Grayson using Dick Grayson to work through some personal issues of her own -- and one of (though certainly not the only) reason this is such an abjectly awful story is that the reader is basically being forced to take part in Devin's self induced therapy.
The Nightwing/Tarantula encounter is a clear cut case of rape, and I'm frankly amazed by the sizable contingent of folks arguing otherwise.
Dick had what amounts to a nervous breakdown in the wake of Blockbuster's death, and was therefore incapable of giving consent. Period.
Though I agree with the posters who are upset that this incident was basically ignored, I personally hope that that means it is well on it's way to fading from DCU canon entirely. I'd prefer an out and out retcon that explicitly stated it didn't happen -- but ignoring it to death is still acceptable.
My, ahem, 'personal canon' goes something like this:
1)Nightwing has a nervous breakdown and/or possibly goes into a kind of shock. This renders him unable to resist, but also unable to...preform.
2)Tarantula, sociopath that she is, is undeterred, but has to content herself with dry humping Dick on the rooftop, fully clothed (this is to rationalize the only part of the debacle that was actually 'on screen'). This does make Tarantula innocent of rape, but she's still guilty of some form of sexual assault/battery, not to mention of being really, really evil to one of the few people that was ever good to her.
3)Dick represses the trauma for several weeks, but finally confides in Babs.
4)Babs tracks Tarantula down (possibly with the aid of the rest of the BoP) and, her paraplegic status notwithstanding, beats Tarantula into a coma.
5)Tarantula is consigned to a remote prison infirmary, never to be heard from again.