You should see what Kobo did. Yesterday around midnight they just pulled all erotica off their library. I only know this because they sent an email to everyone saying how they are going to look at each book to make sure it doesn't violate their terms of service.
The reports I see for B&N is that they are considering removing some erotica. I'm against censorship in general because that I believe in choice and that if you don't like it then don't buy it or look at it.
If all the major distributor censor you can expect other places to sell it to pop up and make a killing from what other places are unwilling to sell.
actually kobo didn't pull ALL erotica off the shelves. There are some authors who are still there. From what I gather they only pulled INDIE authors off the shelves. If you have a publishing company, you're safe.