This is not the Baldur's Gat devs dashing into the mod maker's house and holding him at gunpoint until he deletes the mod. I'd agree, that would be inappropriate.
What this is instead is the people running Nexus deciding that they don't want to be associated with this kind of content and that they are not willing to host it. If you owned a bar and it started being frequented by neo-Nazis, you'd be perfectly within your rights to kick them out, because you're a private business owner and can conduct it however you like within the bounds of the law.
Your position isn't the "live and let live" idea you think it is, because what you're in effect claiming is that the people behind Nexus should be forced to host content that they find extremely morally objectionable.