I think the truth behind this little folktale is simpler & sadder than any attempt to claim that “nakedness” means something else, or make Noah’s alleged behavior in this story make sense.
I think that this particular story is a folktale. We have no more reason to believe that this happened than that Hercules stole Hippolyta’s girdle or that Prometheus stole fire from Helios. In fact, we have a good deal less, for one simple reason:
The story was told among the Israelites for a contemporary purpose, just as it would later be told among the Anglo-Saxons in America for their own purposes. It is a myth, a lie told about an already defamed & defined victim class to claim an ancient directive to abuse them. The reason it’s in the book boils down to one sentence:
“Damned be Cannan, servant of servants may he be to his brothers!”
What many fail to realize when reading the Torah is that “saw his nakedness” isn’t a euphemism. We in modern English-speaking culture, just now recovering from Bowdlerism, imagine it’s the same kind of delicacy. But as this story shows, just seeing his father naked was a shame to Ham. The text of the Torah clearly indicates that the ancient Israelites, at least by the time of the “J” writer, had an almost psychotic abhorrence for nudity. It was not only a sin to engage in what we recognize as sexual congress outside of marriage; it was a great shame to see anyone but one’s spouse naked. It was a crime to see one’s relatives naked, tantamount to incest itself.
It seems that when the Israelites invaded the land of those they called Canaanites (the word, as Dex points out, connotes a humbling; perhaps this was a contemptuous catch-all for nations more properly known as Amorites, Perrizites, Amalekites, Jebusites, Hittites, et al.), they found an Anatolian-style pagan culture, that was more blatant about sex, had temple prostitutes, & was (at least somewhat) freer with nudity. But I’m out of my field here, so maybe someone up on the archaeology can tell us more. I’m pretty sure ancient non-Hebrews of the Levant revered sexually-identified fertility gods (Asherah & Baal), rather than the single uptight “Jah” of the Hebrews.
This story ties in Hebrew culture’s hatred of nudity with a condemnation of Canaan. It’s propaganda.