I think the root of the problem is that it's just extremely unpleasant to moderate user-generated adult content. It's already difficult to moderate content on a somewhat serious online forum like Hacker News. Facebook moderators have been in the news and on South Park due to the emotional drain of the task. Who's going to sign up to pore over everyone else's weirdest thoughts given form? Certainly not me.

So this results in websites that allow people to upload pornography having lapses of moderation where something bad gets through every now and then. One day some creepy clip goes viral among some social conservatives and they try to make legal threats against the site and anyone they consider "affiliated". This creates problems, credit card companies are very protective of their reputations, and they usually decide the conservatives seem less bad.

Then someone sets up a new site that allows user-generated adult content and the cycle repeats.