This seems to be a fairly reoccurring theme - countries requesting internet sites to mass censor user content. Rarely though do they understand the scale of what that means. In the article, it stated that they wanted each item to be screened by a human. In the same way that I'll quote a client a much larger price if they want IE6 support, I often don't see why these companies don't just quote the country a price for the manpower required to do this. Kind of a, "Listen, pay us X per year to hire people to do this. Otherwise, it's simply impossible for us to do, and we'll fight your request in court til the end of time."
While I doubt any country would actually pay, I think it would serve to at least educate the politicians as to how much work censoring the internet actually requires.