"So, how was it supposed to work?"
1) block all .XXX web sites.
2) (optional) block sites with key words in the name with (if you're lucky) exceptions for sites that can demonstrate they're not smut peddlers.
3) (optional) also block sites you're advised about that are reported to peddle smut (and forget to tell them or explain how they can (not) challenge the block to get it removed...)
4) claim success.
Positively identify which sites provide smut and add them to the block list, a task that will be never ending as new sites pop up or use proxies to help them move to avoid filters, and will cost the ISP's a fortune to maintain while only being able to report they're working on blocking sites.
Asking for a white list to be maintained is even more work for the ISP's, at greater cost and all that will happen is permitted sites will be hacked and used, or sites will be registered while 'clean' with links to the smut to bypass filters resulting in the ISP's having to admit failure.
Guess which method the ISP's would take.