The reason Mycroft is so keen to have Sherlock deal with Irene Adler, rather than using any of his usual agents, is because Irene has compromising pictures of him (maybe he went to see her once?) and he knows Sherlock won't want to even see them, much less use them for blackmail.

Of course, Irene picks up on it, and she's only willing to hand the pictures of Mycroft over if Sherlock looks at them one by one. In detail. While she describes exactly what was happening at the time. She's trying to gross Sherlock out or make him respect his brother less, but her plan backfires - Sherlock is mostly just impressed that Mycroft can bend like that, take that kind of torture, etc.

Holmescest isn't really my thing - I'd prefer Sherlock's interest to be academic - but I could see this going either way!