They're suggesting a platform for sexually suggestive content, as opposed to one for sexually explicit content.

Which might actually be a viable niche. There are a lot more explicit websites out there than softcore ones.

I understand the distinction, but ultimately the reputation issue for twitch would be identical.

"They're opening a porn site?"

"No no, its a separate site for softcore...err sexually suggestive material"

It isn't a win either way, and they'd be entering established markets that already have entrenched businesses and wouldn't have the 'walk through' traffic the video games sections of twitch provide.