I think your concern was slightly alluded to by Justice Breyer in the oral argument. 5-20 years in prison of punishment is excessive for material that was recorded between two consenting individuals.

I also had another hypothetical question about this statute. Since sixteen is the age of consent in many states, suppose two sixteen year olds had sex (legally) and then recorded it. They kept it and each told their friends they had a hot sex tape of themselves. Could they too be convicted under both the possession and pandering elements? I guess the answer is a pretty obvious “yes,” but that raises many other concerns for me.

No; Justice Scalia did not hold the statute unconstitutionally overbroad. Writing for the Court, Scalia held the statute violated the first amendment because it punished speech on the basis of its viewpoint. Writing for four concurring Justices, Justice White argued that the Court should have held the statute unconstitutional as overbroad rather than as viewpoint discrminatory.