Cosmokid brought up some good points about publishing with Kindle - you really don't have control over your books/business since Amazon could decide to pull erotica from their catalog at any time and then you'd be out of luck.
Would self publishing be an option? Get an e-junkie account, put your books for sale as a PDF?
I know that having the larger Amazon/Kindle audience would be better, but maybe a combination? Have some works on Amazon and then others available only through your site?
Maybe even advertise your site in the Amazon books for "exclusive" offers?
The big problem I see is that it wouldn't be in Kindle format, which sucks, but maybe that's not an insurmountable issue.
I'd love any feedback/comments you might have.