Was Queen a sellout?

If you listen to their early material (The May/Taylor band Smile, or Larry Lurex) they had their beginnings as sort of a heavy pop band, they were not particularly prog, although they certainly incorporated some of that into their sound while that sound was popular.  They were never a prog band.  Bands have a right to do what they want to do, whether they do what they want due to a desire for popularity and the money that comes with it, or because that is where their musical interests take them.  I think it's wrong to accuse bands of selling out when that is what they do for a living.  We may not like the direction a particular band takes at a particular time, but the band doesn't owe it to us to make sure we are personally satisfied with their product.  

They just changed with the times, and managed to stay popular. Good for them. Even their 80s stuff is still pretty complex a lot of the time, but in different ways. Finding interesting ways to use technology that's available. Some of it sounds corny now, but I could say the same for some of their early songs.

What is musical integrity?

Of course they sold out. Just compare A Night at the Opera to Works. They made their mark as musicians and the decided to cash in. They were still good musicians, but once they tasted the sweet, sweet wine of success they never turned back. In fact, I believe they even tested their fan base to see what they could get away with. Exhibit One: Flash Gordon Official Soundtrack. Still, they put out some good songs and given their concert performances, I do not fault them, even if I lost interest in them by Jazz. And we are still feeling the loss of Freddie Mercury.

They are a bit like Genesis, I'm not a big fan of their post-80's stuff but they managed to stay up there.

I think Queen did exactly what they wanted to do.  They could be influenced by changing times and changing music scenes as other bands could, but ultimately, I don't consider that they sold out at all.  In fact, considering that Queen and bands like them make music professionally, I think saying they sold out is silly.  Bands are trying to make a living on the music they make.  So if their music doesn't sell, they are going to have to change their sound so that it does sell or they can go broke and eat grass or change professions.  But again, I think Queen did what they wanted to and they did it well enough that they sold massive amounts of records.  

No clue...call Brian May and ask him

Seriously, the same could be said for Genesis, Yes (90125, Big Generator).
I have no problem with bands doing this, commercial success = money!! And they deserve to make a lot of money, especially back in those days only album sales and touring paid the bills.