Multiple reasons. Back in those days HBO and the like were just building their brand. What those companies would offer forms the association for what they would be known. At the time they weren't even sure pay television would even work. Since programming was built around specials and 'events', consumers had no idea what they would be buying for their money. Gay TV? Pay TV would have died in its infancy.
The larger culture is 100% heterosexual dominate. Things we take for granted now, like Gay Marriage were unthinkable back then. It has been a commonly accepted rule of thought that to appeal to one group was to disavow another. Serve gays and straights would run. There are many, many more straights than gays. So their dollars counted more.
There is no national standard regarding pornography. Laws vary from state to state. And while most state have abandoned the notion of adult video being obscene, there are and were laws on the books that define certain actions as obscene. Interracial sex. Bondage sex. Gay sex all have pockets of the country where distributing those types of porn risk having the law turn on you as beyond the 'standards of the community.'
Especially back then.
Bottom line, fear was the driving factor. Fear of losing $$$. Fear of legal action.
While they've moved past the need for XXX porn to survive, they totally recognize tits, ass and dick sell. -You can't find a hit show where someone doesn't strip to their ass on a regular basis. (an exaggeration, but not by all that much...)
