Initially I was under the impression that this was the case of softcore eroticism, but even if it's not I don't think they should be barred entry into a digital marketplace. It might be appropriate for Steam to make a gated section of their service for these titles, but if this is something the community wants to see I think there's an obligation to let these products exist for consumption. I'm not suggesting a flash game of a pornstar getting boned is appropriate or should end up on steam - but this is why Greenlight exists.
There's also a pretty compelling argument that there's games that will literally allow you to murder police with a purple dildo and throw their bodies into a trash compactor, which while cartoony and played up for laughs is a lot more offensive than a lady's breasts.
Getting back to a point Classic made earlier:
Seventy-three percent of all games sold in 2011 were rated "E" for Everyone, "T" for Teen, or "E10+" for Everyone 10+. For more information on game ratings, please see www.esrb.org.
This is true, but a lot of this is because game developers bend over backwards to get a T rating and retail outlets shy away from putting mature titles on prominent display. And in the case of games that manage to get an A-O rating, there is no major distributor of software titles in the United States that distributes A-O titles in a brick and mortar environment. For mainstream game developers, getting an A-O rating is a death sentence and in some cases the politics behind getting the rating you want involves complex politics and often greasing palms - as was the much-publicized case with Oblivion. In the past, 'erotic' PC games had to be purchased in magazines and catalogs and as a result they tended to appeal only to the main porn buying audience. Japanese erotic games appeal to a wider base of players, though, and while some of them are indisputably porn ("extraction games") some of them have rich gameplay elements (the Rance games, as we saw from Doom's LP) and in-depth stories (any of the Type-Moon games) and while those elements could be introduced by cutting the erotic elements and releasing them that way, I feel like that's unnecessary censorship and it would certainly make some of these studios hesitate at licensing their game to American developers.