This is exactly what happened in China when Google left - Baidu exploded in popularity and now dominates the market so completely that it would be nearly impossible for Google to unseat it.
The Chinese government does this on purpose to facilitate the growth of its own domestic companies. The Great Firewall serves as much of an economic purpose as a political one. By degrading service quality of foreign companies, it opens space in the market for domestic companies to establish themselves and gain market share. It would be impossible for any one of those companies to bootstrap its initial userbase if a giant American corporation already cornered its market.
http://www.forbes.com/2009/12/21/google-baidu-internet-intel...
I agree in this case, the law isn't a good one, the snoopers charter generally is a problem.
But I don't want companies throwing their weight around more than they already do (and they do, but in a largely predictable capitalistic, profit maximising way). The road to companies becoming de-facto governments is paved with good intentions.
Initially you invite the Roman Empire in to help secure your borders against regional powers, then before you know it you're a vassal state, then a prefecture, then Jerusalem is burning, and your country is gone for 1900 years.
Or, to put it another way, you arm the Mujahadeen to help you fight the Russians, and then...
"Arrogant American tax-dodgers refuse to abide by the law... and take it out on you!",
or, "Facebook choosing terrorists over us!"
Promptly follow that up with reports about the number of UK jobs at risk.
All the focus would end up being on the social and economic consequences rather than the cause, and eventually the sheep would turn on you as well... or, worse, just learn to live without you while still being apathetic to the Governments assault on their liberty.
I wonder at what point do we just decide they don't deserve those liberties and work to try to ensure we are part of the haves and not the have nots. It is a shame for the children who won't get a choice, but for the adults who choose this, at what point do we stop them from getting what they want?
I wonder how it would work the opposite way: Start redirecting google.co.uk to uk.google.com, hosted and operated by a non-UK corporate entity outside of UK jurisdiction. Make them block you. China would do it; would Britain?