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Being that your question isn't just if you should do an adult website but if you should do one OR do a non-adult Internet venture, I'd still say it's easier to make some return on the adult side.
Indeed the level of saturation is tremendous but this is also still an industry in which 95% of the people have very little business sense. In the early days you could be lazy, have no plan and in many cases pretty dishonest and make plenty of money without a problem. Now it's become like any other business you could get into which is to say:
You can absolutely succeed but you have to be a real businessperson and plan, work and work within the rules if you don't want to get smacked around. Compared to trying to make a living with a non-adult site it's still easeir. All the same rules apply there but with less % of the sites generating any revenue BY FAR.
I remember a couple years ago people were saying "it's over" and "don't bother" and I can list a half dozen programs or more who launched since then and have grown to over 6 figures a month in revenue. They are the exception but that opportunity still exists.
Duke Dollars
Naughty America
There's just a couple of them for example.
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