You downplayed child pornography as just someone "jerking off to a picture." So yes, you apparently don't see the other consequences of it, and don't think it's a big deal. That's what you don't seem to understand: It's not the 'transfer of data'. Abuse of children might still happen, but this promotes it. You're creating a 'market' for it, where as before it might not have existed.

Now, would I get rid of the internet if it meant getting rid of Child Pornography? Obviously not. I wouldn't get rid of handguns if it meant attempting to stop murder in the United States as well.

Here's the issue with your outlook: You act as though it is one or the other. You must take down the internet entirely or you must allow all child pornography to flow freely through your computer. Your outlook on the law isn't balanced at all. You won't give up any civil liberties because you feel you shouldn't compromise on it.