My opinion as a dev... I think it's extremely important and only getting more important.
There's an ocean of porn out there. What's the point of clicking through a random Renpy story or scouring through some RPG Maker map when I can go to PornHub or Reddit or where ever and see stuff instantly? But a good story or characters should make me WANT to see these characters have sex... random internet porn doesn't create that feeling, it just shows you people fucking and maybe with a dice roll these particular actors/actresses will tickle your sensibilities enough for you to get off.
I tend to think this is why incest/NTR has such a big niche. It turbo charges the character dynamics/relationships in the background so you and the author don't have to spend as much time building them to get to the sex. Taking two characters who are strangers to each other and having to build them up from scratch demands more from both the author and the player.
Also, my feeling is that as art becomes increasingly ubiquitous (same ol' Daz models, same ol' Honey Select, etc.) games are going to need better stories or gimmicks if they aren't in the top X% art wise.