They gambled that the additional ad revenue they'd be able to bring in with a sanitized web site would be greater than the revenue lost from some of their userbase leaving the site. It was a bad gamble.
Yeah, the plan was similar to when Time-Warner acquired Myspace only to not understand what a social media site is inherently; then fumble the bag and sell as fast as possible. They really fucked themselves left right and center on that deal... but everyone's friend Tom is still a multimillionaire.
It's the porn paridox. Porn gets users. Advertisers pay per user... but won't pay anything if there's porn. Users without advertisers or subscription costs are worthless.