Japanese criminal code article 175 states that indecent works must be censored. The pixelated blur became the industry standard and was accepted by the government.

As for "extreme and disturbing porn". That is a judgment call. There are lots of "weird/strange" porn, but it depends on your cultural frame of reference.

As for why Japan became connected with "strange porn" in the west: it was just different than what was common in the west. What was taboo in the west and what was taboo in Japan were different. So what was shocking to the west was normal while items considered normal in the west would have been shocking in Japan.

More specifically I can explain the tenticle porn. Tenticles are not penises therefore do not need to be blurred. It was a way around censorship. That's a simple explanation for a common question.

Without knowing what else is "extreme and disturbing" I cant give any more historical or cultural insight.

Hope that offers some insight.

Edit: spelling

hi all! This thread has been attracting large volumes of responses that do not meet subreddit standards. A reminder of a few rules of particular relevance here:

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This prior question here also contains an answer --> http://www.reddit.com/r/AskHistorians/comments/1s46k4/what_historicalcultural_reasons_have_caused_japan/

Architect Remote Koolhaas opined in an essay in his book SMLXL that the censorship has become a titillating feature of Japanese erotica because it is a play on exhibition and concealment, which is a tradition in Japanese aesthetics.

I asked a somewhat similar question a year ago. Some of the answers were very interesting.