Yes, the Victorians were that prudish, or at least pretended to be in public.
In Wuthering Heights (published 1847) there's a mention by the "everyman" character Mr. Lockwood of words being blanked out in this way, when he has difficulty sleeping during his stay at Wuthering Heights, and notes Heathcliff's anger:
'And you, you worthless—' he broke
out as I entered, turning to his
daughter-in-law, and employing an
epithet as harmless as duck, or sheep,
but generally represented by a dash
(We can only guess what the word might have been, but it must have been obvious to readers then — maybe cow?)
There's also (in my edition) a note in the preface by Charlotte Brontë about the way offensive words were blanked out like this, and how some words were (with much consideration) kept intact rather than being expleted, in order to convey the coarseness of the characters in the novel (devil is used quite liberally). Many Victorians found the novel quite shocking at the time:
A large class of readers, likewise, will suffer greatly at the introduction into the pages of this work of words printed with all their letters, which it has become the custom to represent by the initial and final letter only—a blank line filling the interval. I may as well say at once that, for this circumstance, it is out of my power to apologise; deeming it, myself, a rational plan to write words at full length. The practice of hinting by single letters those expletives with which profane and violent persons are wont to garnish their discourse, strikes me as a proceeding which, however well meant, is weak and futile.