cuz you get blue balls after watching it
o'Blue , "any little smutty touch in song-singing, chatting, or piece of writing." Farmer ["Slang and Its Analogues Past and Present," 1890] offers the theory that this meaning derives from the blue dress uniforms issued to harlots in houses of correction, but he writes that the earlier slang authority John Camden Hotten "suggests it as coming from the French <span id="hotword
Bibliothèque Bleu , a series of books of very questionable character," and adds, from Hotten, that, "Books or conversation of an entirely opposite nature are said to be Brown or Quakerish, i.e., serious, grave, decent."
The color "blue" is symbolic of many things, yet the most curious may be matters of obscenity and puritanical decree. The Word Detective notes the phrase "blue laws" dates back to 1781 when the Reverend Samuel Peters published his history of Connecticut. He painted the strict laws of the puritan colonists as "blue laws," meaning "bloody laws" or laws that were enforced by brutality. "Blue laws" became shorthand for any strict, old-fashioned laws, such as laws forbidding liquor sales on Sundays.
The use of the word "blue" to refer to risqu� content was first recorded in Scotland in 1824. According to World Wide Words, the Scottish Gallovidian Encyclopedia linked "blue" with a "smutty touch in song-singing, chatting, or piece of writing." One theory as to why "blue" meant "lewd" is that prostitutes in prison may have been dressed in blue gowns. Another theory mentions a series of ribald French books titled Bibliot�que Blue.
While there's no proven connection between these uses of "blue," it's not inconceivable that both influenced the term "blue movies." Pornography has been outlawed at various times and places, so blue laws might have forbidden the movies and thus the color became associated with the content. Also, when you curse a blue streak, you're talking dirty, and such language can be connected to explicit films. Another explanation for "blue movies" is that striptease acts may have once used blue spotlights.
The most plausible theory is certainly that it stems from Bibliothèque Bleu. So I blame the French (quelle surprise).