Your own examples show the slippery slope this is. Walmart, Netflix, and Disney all DO carry content that some people want banned†. No matter what you're talking about, someone is going to take offense and want the content removed entirely.

Collective Shout, the group behind this latest censorship push, also wanted Detroit Become Human to be banned because the story depicted someone abusing a child. If we're banning that, why not ban memoirs of child abuse survivors or "James and the Giant Peach"?

You suggest it would be easy for Steam and Itch to run alternative storefronts. Given that they removed content that was offensive to their payment processors, they'd need to engage with high-risk payment processors to power these new store fronts. To say nothing of the technical work involved, those high-risk payment processors certainly charge more for their services. That'd raise the already high 30% that Valve takes on most transaction.

Additionally, if a games journalism website also has relationships with payment processors, are they allowed to review adult games even if those reviews don't include pictures? Or are they going to be equally punished for giving adult content a positive rating?

This all limits the options available of responsible adult consumers and costs creators of LEGAL content revenue.

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†Here's a longer look at your examples:

Define adult toys. I assume you mean dildos. Walmart doesn't sell those in physical stores, but they do sell them online. Additionally they, like most other stores, do sell lube, condoms, and vibrating rings in their brick and mortar store. Every clothing store that sells underwear sells something many would describe as lingerie. Target has an entire lineup of "after dark" board games stocked right next to Candyland.

"After Netflix published a marketing poster showing the [11 year old girls] twerking in revealing cheerleading outfits without any context, an online petition calling for the cancellation of the US release received more than 140 thousand signatures."

'According to a source close to the production, Pixar’s next feature film, “Lightyear” does feature a significant female character, Hawthorne, who is in a meaningful relationship with another woman. While the fact of that relationship was never in question at the studio, a kiss between the characters had been cut from the film. Following the uproar surrounding the Pixar employees’ statement and Disney CEO Bob Chapek‘s handling of the “Don’t Say Gay” bill, however, the kiss was reinstated into the movie last week.'