I hate you for prompting me to rant so early in the morning. You are damned - and my broken coffee pot is twice damned.
No. The idiots aren't in the companies they're on blogs, in the sumpreme court, and in national and state legistlatures. This all stems from the fact that obscenity law in the United States is as ridiculous as it is vague and arbitrary and because the ESRB simultaneously offers a shield against liability in relation to obscenity laws while crafting their ratings to appease the noisiest reactionary prudes. Also while the US supreme court has ruled their ratings can not be given defacto force of law, they have still held that the obscenity of a thing on its own merits can justify legal restrictions on its sale and distribution.
PS On Steam Works, Team Fortress 2 has about 3000 mods but only about 40 of them have been approved for download. If everyone decided to put their mods on Steam Works it would kill the modding community unless they put the mods both places.
So the incestous machinery of video-game censorship starts (or ends) with how the ESRB crafts ratings around the loudest righteous-indignation over specific content (turns out that in the US the loudest prudes get their pilgrim-era-pantaloons in a knot over sexual content first and foremost and then certain types of extreme violent content but typically more so when crime or sex is also involved). Retailers seek to limit their liability in the face of 50 different states with inconsistent treatment of, reaction to, and ways of defining "obscenity" by treating these ratings as meaningful guidelines and adhering to ESRB recommended restrictions in policy if not in action.
That so many of them do so is really the core of the defense this offers them - since it is "universally accepted" they can protect against the allegation that they knowingly and improperly sold obscene material by arguing they took appropriate measures and acted in good faith compliance with state and local laws. By simply not carrying any "adult only" titles and restricting "M" rated sales they protect themselves against boycotts and legal threats with effectively though with the grace and elegance of explosive-backed ablative armor plating. Finally, as a matter of practicality, game developers conform to these ratings and the reality that "M" rated titles will see a smaller potential audience and that "Ao" titles will have little to no retail presence whatsoever.
Additionally "Ao" and "unrated" titles will attract the attention of the same loud prudish anti-video game zealots whose preferences inform the crafting of the rating system itself and highlight them as targets for boycott and potentially legal action claiming them to be obscene. While the supreme court has acknowledged that an "Ao" label does not automatically mean the material can be considered obscene, they still affirm that obscenity can be subject to legal restriction and if you're going to chose something as the target of your rabid self-righteous buffoonery then its probably going to be the things the rating-system which caters to your rabid self-righteous buffoonery says you'll hate.
So the gaming companies are being pragmatic in such decisions, even if they might lack a degree of courage in them. The retailers are also being pragmatic in a hamfisted way, though perhaps even less brave and with a bit of culpability since they give the extra-legal and unelected ESRB its real power. The ESRB is filling the vacuum caused by the inconsistent and vague legal concept of "obscenity" in the US - that they do so capriciously, lazily, are easily influenced by outside pressure makes them awful and sniveling but not necessarily idiots. I'd call them cunningly adapted parasites. The real idiocy can be found in the law and legal decisions surrounding it.
