The contents are still in the blocks, there's no way around that without breaking the chain. Justin just censored the UI he controls. By the way the blacklists on peakd.com work basically the same, and have existed for longer.
Also see my recent post about my personal account (alongside my project's account @dtube) unfairly getting on that 'spammer' blacklist. Do you think these blacklists are decentralized too? :D
What happens when contents are not in the block though? What stops witness nodes from choosing to decline accepting operations as Steem witnesses have done for other account operations in the situation with @darthknight?
As for blacklists I have little issue with them. It's up to each site to determine what they'd like to show on their own domain. As long as the data can make it to the block then I have little issue. If I find that peakd.com is censoring content that I find valuable then I'll either move to Hive.blog or spin up my own condenser. Do you think you should have to display everything a user uploads to d.tube?