I foresee this becoming a bigger and bigger problem in the future. I find it interesting that they're not (or maybe they are) pulling the excerpts from other spicy traditionally published books.
They don't seem to be pulling them from traditional titles, but I could certainly be wrong. We've been discussing this on Kindleboards, and my personal guess is that indie success has led to problems-- ie, the prevalence of erotica in the top PubIt sellers has caused some people to be offended, and to start clicking "report this" in large quantities. That's just speculation, though *shrugs*.
Yeah, I've seen the report this button. I think that's a very dangerous thing to have under every book because it can and WILL lead to censorship. :(