If the Chinese want to block a US software company from doing business in China by blocking access to them, then the US should impose tarifs on any software outsourcing to China with stiff penalties for any companies trying to circumvent it.
It's not the generic 'Chinese' who are at fault, but their government. Economic sanctions, like always, will just hurt the people while strengthening the government's power base.
Its definitely the government, but not officially. Officially there are various technical problems...that are never the ISPs fault. If you get on the phone with them and ask why Facebook is not working, they'll actually say "it must be facebook's problem!". The censorship is not official and all shady, and so going through the WTO doesn't really help.
to a point... enough economic pressure will eventually trigger revolution... or can at least make it very unpleasant for the government to continue it's ridiculous position
Is this supposed to mean that the Chinese are too tame and subservient?
They already had a huge communist revolution -- and two more revolutions in the last 120 years (the Boxer and the Hsin-hai Revolution). Even the last 2-3 decades, they had massive strikes and struggles, and the Tien-An Men square thing.