In my opinion Steemit should be a censorship free community where users can post whatever they want. I am not even 100% against 'illegal' content being posted, although I am on the fence about certain types. Who am I to decide though.

Being able to freely post and view content censorship free does not necessarily mean that everyone has to view it though. Being able to chose for yourself whether or not to view something (without having a say in what others can/should do) still falls within the bounds of a censorship free community (IMO).

If we put NSFW content out there without the ability for users who don't want to see it to block it, we are going to alienate a large portion of our potential user base. I would agree that the people that are saying "NSFW content shouldn't be allowed here" are probably better elsewhere, but people who are just upset at not being able to hide it from their kids or co-workers are not necessarily people we want to push away.

There are a lot of ways to make the system more robust and elaborate (like degrees of NSFW content) but I don't think that is really necessary. Just having one "nsfw" tag that allows users to have some control over what does/doesn't get shown by default, seems like a viable solution. There are some gray areas, and a big rabbit-hole to go down as far as "what is really NSFW" - but I do think that a lot of it is fairly black and white. Given the right tools - I think the community can handle it.