IP blocks can be pretty annoying for the hosting companies and network providers. You can easily end up in a situation where certain number of your (valuable) IPv4 addresses are blocked by different authorities over the world. Your other customers might not like the idea that their website is inaccessible for some people due to the fact that you are also selling capacity to torrent sites.
Same kind of thing has happened with email. Due to the way spam blocking works, the companies that provide email sending services have started to police the traffic themselves.
And then people start automating IP spoofing on a mass scale, to make TPB look like a White House server.
It's an arms race that cannot be won by censors, because the entire infrastructure has been built on loosely-coupled nodes and technologies that can be encapsulated or mimicked.
The Chinese are getting closer and closer to a breaking point, as more people find out how the "real" internet feels like (either by travelling or by finding ever-easier tunnelling technologies); as soon as the economy slows down and people start grumbling, the gates will fall. It's sad that other countries are trying to go the opposite way.
