It's not just pornographic material that's troubling. "Hate speech" could mean, literally, anything (which is why it's protected speech in the US, as per the Constitution). Steam should simply adopt a "Play at your own risk" policy for all games, period.
I can't see this becoming a problem.
You could probably report the South Park game for "Hate speech" but guess what'll happen. Nothing. Nothing at all.
People could report Bioshock Infinite for being offensive because they doesn't agree with the "religion" in the game. Guess what would happen. Nothing. Nothing at all.
They're there to make sure it looks good. Only the extreme cases would get removed but those extreme cases would have been noticed anyway.
This feature won't make a big difference. Perhaps when it comes to non-working games or false advertising (WarZ incident) but not for anything else.