It makes a little more sense when you consider Frank (MC) has raised Abby since birth, and has been a stepfather to Becca & Lily only for the last 10-ish years. And in all that time, he's had no sexual feelings about any of them until the last month or so (when he became free from Shannon's talons).
Yes, the game has been in development for about 5 years, but in-game, it has only been a month (the story we see starts on March 30th, and the latest release tackled May 1st).
Realistically, there's bound to be a higher "barrier for entry" to suddenly get sexually involved with someone you changed diapers on, and has known all your life. After all, Frank (MC) has not been shown to be a particularily sex-crazed person before, and has chosen to be on the side of caution, since he doesn't want to risk his existing relationships with Becca, Lily, and Abby for sexual gratification.
In the most recent update, though, Abby has shown more clearly what she actually wants, and as Frank mentioned, he's planning to run his thoughts by Nessa (the therapist), just to make sure he's considering every pro and con when it comes to finally giving in. It will inevitably happen, we just have to go through the motions. Keep in mind, Frank isn't just considering his own desires, but also his promise to Abby's mother about keeping her safe (even if it means from himself), so there's a wall there to be broken down.
I expect in the next week or two (in-game), we might see things escalate between Frank and Abby, though.