I agree with those who are saying that you should fill the niche and team up with other erotic authors. At the end of the day, people will go where they can find what they want to read - if they want to read glittery vanilla romance, they'll go to ... what did you say that website was called, All Romance Books? And if they want some hardcore erotica, more and more will turn to your website if you really work on your bases, and get out there contacting erotica authors and publishers, promoting it on twitter on the likes.

If anything, you shouldn't get angry about this - you should see it as a business opportunity. This is giving you the perfect chance to start up your own ebookstore!