Gracie Passette, editor at both Sex-Kitten.net and Tit-Elation.com, writes in her blog a piece called Erotica: The Little Sister Who Suffers In The Shadows in which she discusses the status of the genre.
For more on the status of erotica publishing & sales:
Erotica on the Rocks
Erotica in Australian Libraries: Are We Negligent Collection Managers?
Too darn hot: Romance fans clash over a new breed of explicit, kinky love story. (1999)
Avoiding the Potholes: Adventures in Genre-Crossing
Book marketing and success in black
Literature & Awards in glbtq works
The Resurgence of Erotic Literature (1998)
Joel Rickett on the latest news from the publishing industry (2005)