Jack was from the 51st Century, where humans had made themselves irresistible, so they could seek new life, and...as someone had onece delicately out it...dance. As their fellow Torchwood members had often said, Jack would shag anything on two legs. Ianto couldn't blame Jessica for being attracted to the man--he was gorgeous, and he had a good heart in there somewhere, not to mention that he was ridiculously good in bed--nor could he blame Jack for seeking comfort with a beautiful young woman who was notably harder to kill than your average girl (or boy) next door.
He hadn't meant that Jack only wanted her because he couldn't have what he really wanted. "I don't have all the answers yet," he said, "I don't know if I ever will. I just know that Jack is taking this really hard--my death, the end of the world as we know it--and he's desperate to try and get something right. Anything. And desperate people do desperate things." Like try to sell their souls. Jack had said as much in their dream.
He gave a soft, nervous laugh as Jessica asked if she was supposed to pretend he wasn't there. "Under the circumstances," he said, "I think maybe it would be better if the three of us got together to address the issue? I know there are bigger things at stake here than our feelings, but we do both have real feelings. It isn't fair for Jack to expect either one of us to carry on as if the other isn't there."