I'm not saying that the USA is not conservative or that there are no conservative values in America. You totally passed over my point. The OP said that the USA seems to be more conservative than MOST other countries in the VIDEO GAMES MARKET. I was saying that's just absolutely not true. Please tell me of a (non-porn) game that sold in other countries but never sold here in the USA.
AFAIK mass effect was sold cut in the US. One thing when you are talking about video games (and movies as well) is self censorship though. Most games companies produce games that are aimed mainly at the US (largest single market). This means that they are trying to avoid things that might hurt sales in the US, sexual content probably being the number 1 thing to avoid if you do not want to risk not being able to sell your product at Walmart for example.
Just look at the Elder Scrolls series. In Daggerfall you had quite some sexual references (besides some pixelated naked men/women). Nothing explicit but it made the world much more believable. In Morrowind they started to tone down these references and in Oblivion you'll have to look very closely for them. In Fallout 3 you could observe similar patterns.
Although all of these games did not have real explicit sexual content the little sexual content has been hidden so it would not hurt sales in the US.
This wasn't that much of a problem back in the 90s when games did not cost millions of dollars (therefore games like Daggerfall and Fallout could have some sexual references) but today companies won't take the risk of loosing sales in the US when they have to invest several million $.
This probably won't be changed by digital distribution. There might be a chance that small titles will have more adult content, but AAA games won't. This would fully depend on the main platforms though as they could just not sell titles that might hurt their US business.