1. Reason 1 :- EXPENSIVE REELSSource : Google Images
In the year 1920 adult film's market was not so high and they used to make films with very low budget and at that time the films which used the normal reels were way too expensive, so they used the second hand reels and those reels were left with blue markings and when final output of the video used to come; it was a blue in shade so it became popular with the name "BLUE FILM"
2. Reason 2 : BLUE LAWSource : Google Images
There was a law named as BLUE LAW in which there were certain restrictions on many things like no one can work on Sundays, Limited amount of liquor can be sold, also the shooting of adult movies were very much restricted under this law, so that was also the reason that these kind of movies got the name "BLUE FILMS"
3. Reason 3 : First Adult Movie was named as "BLUE MOVIE"Source : Google Images
In the year 1969 the first adult movie named as "BLUE MOVIE" was shot which was having too many adult scenes which were viewable in blue colour due to some technical issues, that movie was aired in many theatres in United States and after that these kind of movies got the name "BLUE FILM"