as the japanese game market suffers, many publishers have chosen to stick with what is guaranteed to at least have modest success. perverted games in japan have a hardcore niche audience that buys limited edition versions consistently. these games are also very cheap to make, so it is a low risk, decent reward business to be in.
Bingo.
Eroge (or really, Visual Novels), compared to other types of games, cost next to nothing to make, and they always get bought by hardcores. Therefore, there's no reason
not to at least have a shot at making them, and hope they make it big (Note this: The Visual Novel/Eroge business is HUGE in Japan. And if you look at Anime adaptations right now, whereas the most popular used to come from serialized Manga, now those have been displaced by adaptations of Visual Novels in the popular consciousness).
This isn't going to stop me from calling Japan my favorite weirdest place on Earth, though.