I think the parent's point was that this probably won't attract that many new users - most of the people who would buy porn games (especially VR ones) are probably already on Steam.
I do worry a bit that it might trigger some sort of moral panic when e.g. parents hear that one game program Steam is giving 8 year olds free porno or some other exaggerated claim. Jim Sterling made a pretty good case for this in a recent video about the school shooting simulator game, that by allowing that kind of content Steam is exposing itself to becoming the victim of a hysterical panic like has happened many times in the past.
I think Valve is morally in the right with their hands-off approach, but it is politically naive. They need a different brand for this.
Segregating the controversial content away behind an 'edgier' brand with a different client would deflect a lot of criticism, even if it was just a new coat of paint over the Steam client. Valve needs to make the content expectations clear to people who have never used Steam themselves.
I agree, I think they should focus on filtering quality not censoring based on content (as long as mature content is gated off). They should be policing broken games and asset flips.
Users would join the service if it had a game they wanted. Its games and Steam's games would not have much overlap, if any.
Having it seperate would also allow them to change the default UX. Among other things, the default behaviour of sending notifications to your friends like, "Bob has started playing Call of Duty," is probably not the right behaviour for porn games. If they don't firewall those sorts of games off into a seperate area, Steam at least needs to clearly communicate at every point where the user interacts with the game on Steam (store page, cart, profile, library, etc) whether that interaction is public or private, because historically just about every interaction has been visible to the user's friends.
I do worry a bit that it might trigger some sort of moral panic when e.g. parents hear that one game program Steam is giving 8 year olds free porno or some other exaggerated claim. Jim Sterling made a pretty good case for this in a recent video about the school shooting simulator game, that by allowing that kind of content Steam is exposing itself to becoming the victim of a hysterical panic like has happened many times in the past.