I think it's similar to what happened to Pornhub. They were going to risk not only losing advertising but also getting their bank accounts suspended due to these companies not wanting to associate with and potentially land in legal trouble with what is the very real issues of laws that govern adult content which differ from state to state but from country to country as well. It's very complex. And if they aren't very careful about restricting what is and isn't allowed the legal and social fallout from that will utterly destroy their business.

Pornhub is a porn site so obviously can't ban porn. So severely restricting uploads was their only option. Tumblr isn't a porn site and probably just found it easier to ban it outright rather than deal with managing it. It also does make it easier for them to expand if they limit adult content.

I think it's worth mentioning that the rules on what does and does not constitute legal porn varies wildly from country to country. Sometimes it's outright banned, sometimes only certain types of porn are banned. Some don't differentiate between photography and drawn art, others do. It's very very difficult to operate any sort of adult oriented business that is going to be operating in multiple countries. You might run afoul of prostitution laws. Etc. It's a huge quagmire and I think nobody in their right mind would ever want to deal with it.

Don't you remember those cases from years back where Canadians were getting arrested for bringing in manga porn they bought legally in Japan. You don't ever want to take adult material across international borders if you aren't absolute 100% sure you know exactly what you are doing, what does the internet do? It distributes it across national boarders easily. It's a quagmire nobody in their right mind would dare touch unless their whole business was that.