It would have to be really, really bad for one word to make me stop reading a story and generally if the word is horrible enough, the story is too. I'll take "penis" any day over "blue-veined custard-chucker", for example. Of course, used in the right context even the latter could have its place...it all depends on the situation, characters involved and purpose of the scene, in my opinion.
As for writing erotic fiction, I've simply stopped giving myself headaches trying to please everyone with euphemisms, nouns, adjective and verbs. It's just not possible to write a detailed sex scene without including some word that someone isn't going to like and I've come to the conclusion that if someone is going to start feeling faint because they see the words: "cum", "dick", "pussy", "tits", "vagina", "penis" or any other commonly used words applied to body parts or fluids, they're probably reading the wrong kind of story.