So the basic premise is that in "the east" (the mystic orient? Define east please), censorship of information is routine and acceptable because it is for the public good.

Even if you can accept that this premise is fine, which I cannot, who decides what information is for the public good, and how? The communist party censored weather reports for years and tried to prevent citizens access to air pollution data. How is this in the public good? How is it in the public good to cut off access to news sources that can enlighten, inform and educate? How is it in the public good to block Facebook or Twitter?

The truth is that the censorship is not in the public interest, it serves only the narrow band of interest of the ruling class. This is plainly evidenced by the speed and totality of retribution against Bloomberg and the new York times for having the temerity to publish information on the leaders of China and their hidden wealth.

Google should stick to their guns and refuse to comply with the communist party. Google have a very good reputation among those in the know for doing so, and it will pay dividends in the future. When the axe falls on this brutal regime, as the axe has fallen in most brutal regimes, baidu will go down the toilet as well, for they have wed themselves utterly to the bastardry. They stand with the party against the people and will be judged for it.

By the way, in case the author is reading, relying on the opinions of your students is not a great way to glean the zeitgeist in China. (particularly on matters of national security or international relations) because most of them can only parrot the official line, and even if they wanted to they know that to do so in the classroom may jeopardize their future. Every classroom has party ears and eyes. What's more, Chinese people often have an instinct to self censor when talking to foreigners because they feel disloyal if they speak out against China. Look at Jackie Chans famous pronouncement for an example.