Well, it's porn all-right, but the AR is gimmicky at best. Here's Pink Visual's Amanda Cory explaining the potential of such application -
And here's a close-up video of the application itself, showing how much the potential is left unfulfilled at the moment (sorry, you'll have to follow the link due to some mild nudity). Not to mention the intrinsic problem of flash-based AR porn - porn websites can record everything that is visible by your webcam while using the application. Isn't that exciting?