>> If kiddie porn, gore and animal cruelty flooded the network, it would cease to be a destination visited by people that advertisers will pay to reach.

Or the opposite. People flock to the internet to see this stuff, the material that isn't on TV or even dedicated commercial websites. They get to view it in the privacy of their homes, a secret between them an their trusted "friends" on facebook. Facebook knows that if it really cracks down, if cops bust down doors over this stuff, that people will go elsewhere to share horrible material. So facebook does a poor job of moderation, one just good enough to avoid new regulation but not so good as to actually make a difference.

Advertisers care about eyeballs. They may claim to not want to be associated with X or Y content, but in reality they would rather be in front of an audience than not.