I didn't really find this especially convincing. Too much reliance on the "but others are doing it..." excuse. And the argument that since child porn is restricted, the flood gates have been opened. Or closed, as the case may be.

There's one reason that I think could somewhat justify such a move by Google: now that they're "in China," there's a chance they could have a greater positive influence on that nation than they could from the outside. This makes the assumption, though, that they have any interest at all in being a positive influence. An "influence," yes, I'm sure; but "positive," well, there we run into that old eye-of-the-beholder thingy.