Records? Vinyls? LPs? What are you guys talking about?
Oh wait, are those the really big CDs that only come in black and make good Frisbees? 
No, I’m not really that young.
And the content tagging is wisely applied - Blind Faith’s nothing, compared to the artwork on the original Virgin Killer cover which, as mentioned, even then probably was expected by its creator to shake up market sensibilities but not intended as “porn”.
What the OP mentions about “kids taking pictures of themselves” is a different issue, it’s the absolute overkill of the authorities deciding that in order to dissuade minors from “sexting” each other they’ll threaten them with the kiddie-porn statutes.
The Internet may never be wrong, but the OED is the final authority:
The first use of “album” without “record” in this context is from 1957, which seems a bit late, but it clearly a shortening of “record album.”
Thus the evolution seems to be a set of 78s → a single LP. Since the LP would be the equivalent in music to the older record albums, the same term was used. It was understandable and didn’t need to be overcorrected simply because it was no longer literally true.
The 78 albums looked quite a bit like photo albums. They were shaped like photo albums where each page was a record sleeve. It was necessary to have a dozen 78 records for a symphony, say. When 33 1/3 records came out, the single (or perhaps double) record holder for them was then also called a record album.
The photographer’s account of the Blind Faith album cover photo (which clearly falls into the “art photograph” category, and didn’t rate all the controversy):
http://www.angelfire.com/wi/blindfaith/vvcov69.html
Yeah, OK. I see an exceedingly funny-looking kid.
Note the link to her own statement in 1994 - “By the way, I’m still waiting for Eric Clapton to ring me up about the horse.” Heh.
You say this [see the OP] is art; yet, kids emailing naked photos of themselves IS considered porn. Well, if not porn, it IS considered a sexual offense. Seems to me these laws are backwards and only serve to clog the courts with more important cases to hear!