And there's the problem.
There's just too much self-published material being put up hourly, daily, by the minute for anyone on Amazon to monitor. Look at the amount of plagiarized fiction that's been discovered and exposed.
Amazon could pay someone to look over every submission but that's not what they're about. They're not a bookstore, they sell everything from soup to nuts and won't want to put the money out for someone to vet the work. Ebooks might be *part* of their sales but it's not enough to warrant paying someone full time (or a lot of someones) to do it.
Thus it's either all or nothing. Either you slap down the tags and deal with the exceptions (anyone remember the "breast" furor?) or pay someone to play gatekeeper - which will be more trouble than it's worth. One of Amazon's "bonuses" to self-publishers is that there *are* no gatekeepers and no one vetting what's going up.
However, it's not censorship. There are plenty of other places, including personal websites, where you can buy these types of stories and, honestly, give the author MORE of the price than going through Amazon. It may take a few minutes more but you can get your whatever-porn and give the author a higher cut by avoiding Amazon.
This is all completely false. Amazon can absolutely afford to pay not only one person to play gatekeeper, but an army of KDP content reviewers. If you've ever uploaded something to Amazon via KDP, you'll see that your book spends a time having the status 'In Review' before reaching 'Publishing' status. There is a human looking at it. The first tier review team, likely based in India, seems to only scrutinize a book if it raises certain flags, at which point it seems to be escalated to a much smaller, likely US-based team. This is the team that dishes out all the block notices and whatnot. No one is sure exactly how it works (Amazon's internal processes are closely guarded secrets and employees are bound by NDAs), but from evidence of Amazon job postings and reviews of said jobs in India and the smaller pool of names from which we receive notices regarding individual books, this is believed to be the basic situation.
The revenue Amazon makes from just a handful of KDP authors residing in various top 100 lists is enough to pay the salaries of their reviewers, and their are thousands and thousands of authors, including at least hundreds of high-earning ones. All in all, Amazon makes a significant crapload of money from KDP. In addition to making them very easy money with a high profit margin (no storage, no shipping, only overhead is the review team salaries), it provides a constant barrage of new content for people's Kindles. In fact, there's good reason to believe that the whole reason Amazon conjured up KDP in the first place was to quickly populate its ebook store with content, so Kindle owners would have stuff to buy while the big publishers were still being skittish about ebooks.
However, in the primordial days of KDP, there was no review process whatsoever, because, like you said, Amazon was just about selling stuff on their site. They were not publishers and they didn't see fit to police content. Then all the private label rights bullshit happened, customers were unhappy, and Amazon started screening content and banning accounts known to have uploaded private label rights material and other Warrior Forum crap. Again, with this British media outrage over 'an epidemic of filth', Amazon doesn't want customers to be unhappy (especially leading up to Christmas) so they're preemptively purging a bunch of stuff. Amazon is all about its customers. They do not screen content because they are playing at being a publisher, they are screening content and filtering/blocking certain titles to keep customers happy. It is very much worth their while to have a content review team.
And no, it's not a matter of censorship, it's a matter of convenience. Amazon has awesome infrastructure in place for buying digital content and making it magically appear on your Kindle, eliminating that pesky step of side loading content onto a device. Don't forget their awesome search engine and AI that learns what each customer likes so that it can cough up relevant recommendations for you. Amazon is a vendor that customers trust and like, and to which customers have already given their credit card information. I buy digital content on Amazon more often than not because it's
convenient. Smashwords is an awkward, bungled site and the only reason I ever bother getting content there is because of freebie coupons. I wouldn't expect readers to be all that eager to make credit card transactions on my own website.