They are, essentially, suspending communities devoted to fiction based on the assumption that this fiction might possibly in the future lead to actual criminal activity. (Or so I understand from the legal jibba-jabba). Except for one little thing. IANAL, but even I know that fiction featuring child abuse and incest is NOT ILLEGAL in the United States, precisely because it has been established that fiction =/= reality. If LJ can suspend a community like pornish_pixies, then the cops should be able to arrest V.C. Andrews for Flowers in the Attic. Since the cops, under current laws, cannot do the latter, LJ SHOULD NOT BE ABLE TO DO THE FORMER. There is just no fucking question about it. Fiction is fiction, and writing fiction is not illegal, no matter what it depicts. There can be no liability for hosting a journal whose owner or contributors write FICTIONAL porn, so all that talk about increased liability is bullshit.
Dude, I don't even read chan or incest. Hell, I don't even like either; they both squick me. But this isn't about my fic-reading preferences. This is just a knee-jerk response to bullying, because that's exactly what those Interstellar Wingnuts are, well-meaning they may be -- they're nothing but bullies. And as the good folks at FanLib can attest, fandom does not lie down and take it when we're being bullied, do we? Do we.
Don't take it out on LJ Abuse. They're just doing their job, and their job is to comply with orders from SixApart. The people you're looking for are in SixApart's legal department. This page might prove helpful.