From a technical point this kind of make sense for Valve. I guess the real question is if you're making a 'sex game', are you making a 'game' or are you making 'sex'. While the old point about movies how it's sill that violence = okay, sex = bad, with a video game violence is derived through action and a game is a combination of action and story. That doesn't mean you couldn't make a legit 'sex game', but what this title in question looks like is a collection of cheap mini games that ends with a sex scene.
Now back to the point I'm getting at, the Steam Greenlight program lets the community vote on which games Steam adds to its service. Users will log in and browse over a number of obscure indy games they've probably never heard of, then look... BOOBS!!! As everyone knows sex sells, is there any doubt that this game wouldn't totally win the first vote? And considering the real money to be made, from there it won't be long until the Greenlight program is overrun with sex games and turns into a bit of a joke.
So basically, while I agree with the premise that it's stupid where we say violence is okay but sex is bad there is a clear distinction between being a video game and a porn distributor. Different types of entertainment, and I have no problem if Steam wants to stick to video games and not get into porn. I totally don't know who the big porn players are these days, but whoever they are if there's a market for these types of games they're the ones that should be looking at how to distribute/sell them.