So if I am in possession of a Stinger missile and am nicked for the illegal possession of dangerous weapons that is a ridiculous thing to do? If I am in possession of large quantities of sarin gas It's ridiculous to arrest me and charge me for possession of dangerous chemical weapons?
Your examples are not analogous. The missiles and the sarin gas allow you to cause harm to others at some point in the future. With the porn you're talking about evidence of abuse (ignoring the sexting, etc... cases) that has already occurred. It'd be like arresting someone for having pictures of the results of your stinger missile or sarin gas attack. Not something most of us care to see, but it's not obvious how additional harm is being caused by the pictures.
It's actually kind of ironic if you think of it in the bigger crime context. How much easier would most crimes be to prosecute if pictures of them were readily available, yet here we have a case where possession/dissemination of evidence that a crime was committed is itself illegal. The law basically "If you're going to abuse children keep it quiet."
if making possession of such material illegal gives police leverage then need to force me to tell them who supplied it or even to force my cooperation in stinging the perpetrators?
If the person giving you such material is dumb enough to give you any information that can lead back to him, the police don't need your help. And besides, Obstruction of Justice is a crime itself.