Your post is excellent, as always, but there are a number of arguments that are orthogonal to what you wrote.

1. It is illegal to discuss The Great Firewall of China within China. However, as a result of the press that Google is getting, people in China are now talking about it; communist party members are writing memos and position papers saying that the wall should be removed. None of that would have happened if Google didn't do what they did.

2. Before all this, most people outside of China didn't know The Great Firewall of China existed. Now everyone in the world knows. China can't speak internationally without someone bringing it up. China can't interact with other countries without the issue being on the table, and it shames them.

Why didn't that happen when Yahoo entered China?

3. Google puts a bit of text saying that the results would have been better if your government wasn't censoring you. This message only appears if search results were dropped. No other search engine does this. I'd rather have children in China growing up questioning "why do I get that message when I search for 'democracy' or when looking for vacation/tourist packages near 'Tiananmen Square'?" will have more political impact than we can imagine. (Just like bringing Dallas and MTV to Russia accelerated the fall of the USSR.)

4. Google should get points for the fact that they are censoring exactly the search results as requested, nothing more. Other search engines are dropping a lot more "just in case" (they are being sloppy and careless.) They aren't labeling the results as lower quality due to censorship. Those search engines should be publicly berated at least as much as Google, if not more.