Back then, it would have worked. The web was different then, the porn sites operated differently and didn’t build markets by relying on the tricks they do now (spam, domain typo, unrelated domains, etc.). The hubs, portals, and outlets didn’t exist in the same complexity. Less was centralized, indexed and organized. All the .com domains were rapidly being snatched up.
Adult sites would have welcomed both the exposure (to their audience) and freedom (from groups of the offended) that this top level domain can provide. As long as the non-switch price stayed affordable, .xxx tld could even be used for individual objects of content.. for instance, sites that have some adult material mixed with much that is not, simply have that content linked from their .xxx domain – automatic child-safe exclusion. All groups involved would have benefitted from the line in the sand drawn by the tld.
But much time has passed.
Now it seems to me that it’s too late. Especially if they’re going to charge more for it than other domains. With methods changed and price not attractive, there is little incentive now for porn sites (or any sites with some amount of adult oriented contents) to purchase or consider switching to .xxx anymore. I still foresee there being some usage of this better-late-than-never tld but I don’t expect it to match level of success that it would have so many years ago. Too bad, really.