It is indeed outside the PCC's remit - for good reason. When the PCC was established, the newspaper industry itself - not my Commission - decided that we should not have powers to adjudicate on matters of taste.
The thinking behind it - with which I am bound to say I am in agreement - is that the boundary between deciding on matters of taste and exercising censorship is too narrow. What is poor taste to me is good taste to someone else: let the market - which, as all newspapers know, is highly competitive - sort that out. If newspapers now have a different view, then they should change the powers of the PCC - not criticise it for something beyond its control.
You say that the Commission is an "adjudicator on trial". That is correct: self-regulation - which seeks to balance freedom and responsibility - will always be "on trial". For myself, I think I would win few admirers by acting ultra vires and starting to exercise powers of censorship that newspapers themselves never intended me to have.
Press Complaints Commission