Wait...like, in mainstream works? Really? I can't think of very many, myself, though it's insanely popular in doujinshi of all stripes (even non-H). And no, I don't see the appeal myself, either. And I'm an only child.
Granted, even aside from what's already been mentioned, Japan doesn't restrict first-cousin marriage (nor does most of the world, from what I understand), so "kissing cousins" makes sense as a trope...even though it's still not particularly common.
Also, a couple of fun facts. Incestuous marriage (as in, between siblings or parents and children) is illegal in Japan, incestuous
sex actually isn't. Despite that, there's still naturally a huge cultural taboo (which apparently feeds into the "incestuous story" appeal), to the point that there was actually a huge and overblown moral panic about it in the late 80's. Also, adopted siblings
can legally marry in Japan (see: the admittedly historical Ginchiyo and Muneshige Tachibana), though it's considered pretty weird in reality.
Ultimately, there might be a bit of cultural dissonance in the popularity...but probably not all that much, it's not like incest stories are unknown or unpopular outside Japan. It's entirely possible that such popularity in fiction there might be a reaction of sorts; I buy a bit into the speculation that Japan's pop culture can be (perceived from the outside as) occasionally batshit insane because the culture is otherwise fairly repressive. Look up "nomunication" for another example.
Imperator_DK said:
It's been along for quite a while longer than just the last few years though, and seem to be rather common in digital Japanese romance fantasy; at least enough to attract the attention [http://www.escapistmagazine.com/articles/view/issues/issue_108/1315-Heart-wrenching-Hentai] of this site (though that one's a game, and apparently a good one too).
Oh, sweet me, <url=http://www.escapistmagazine.com/forums/read/326.206764-Neutral-Drow-reviews-Kana-Little-Sister>that it is. That said, it also handles the incest aspect more seriously and respectfully than, well...any other work that I've seen, to be honest.