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About Godaddy:
When buying a domain at Godaddy they will include a small hosting package, called free webhosting, completely free with each domain. This is so that average Joe can get started on his new webpage at once. There are however ads on there and certain things, like for example Adult content is not allowed on these free hosting plans.
Instead Godaddy want to upsell you to their regular hosting. Here you get rid of the advertising and you can have whatever you want on your hosting account as long as it's legal and not hogging all resources of the server. So as long as you are a paying hosting customer, Godaddy will let you keep adult stuff on there.
I don't know why you would do it, especially not since many others offer very cheap hosting and even script support and so on, for about the same price.
But as far as allowing it, yes, as long as you pay. Read the TOS agreement, it's all very clearly written in there.
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The truth is not affected by the beliefs, or doubts, of the majority.
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