Not selling it on your store is not censorship.
Sure it is, it's just not government censorship. Censorship need not be written into law, and it can be implemented at any level, including self-censorship for fear of reprisal / not being sold / etc. It is true that some people use the word 'censorship' to implicitly mean 'official' censorship, but common usage does not.
For example, in the US the 'X' rating was initially not meant for 'porn', but any adult themed film - even A Clockwork Orange and Evil Dead were X rated. However, the vast majority of theaters would not show any X rated films, because they didn't want to be associated with the stigma of 'X rated'. The result was that studios self-censored to avoid the X-rating, because it was too often financial suicide (despite the long term success of my two examples, but that's a different phenomenon).
That's still censorship, even though it's completely indirect and the result of several disparate social/financial pressures. There was no law against X rated films, it was just pressure. It's called 'soft censorship' but common usage just truncates that to 'censorship'.
I'm not saying Steam doesn't have the right to sell / not sell whatever they want. Of course they do. But it is undeniably a form of censorship when a primary retailer refuses to sell something based on content. All you need to do to see why is change the 'objectionable content' to something most (rightly) don't find objectionable -- like if Steam decided to remove games like Mass Effect or Dragon Age that allowed same sex relationships -- to see why some might find any case objectionable.
I know of another large distributor of content (whose name I shall not mention) that sells anything and everything -- but marks any racist/objectionable material in house behind the scenes and donates 100% of profits from that material to various charities fighting those issues. A strange yet somehow beautiful solution to a very complex problem.
