I guess LJ has introduced these changes because otherwise the officials would shut down the whole thing, seize all the servers and arrest the management, possibly for unrelated charges - just to make a point. It was an offer they couldn't refuse...
These people will ban the Internet before giving up power and that will probably be met with relative apathy by the population - "well, if we have to suffer for our motherland, we will...".
Of course 'motherland' has nothing to do with it - everyone knows that they are pawns in a game played by a handful who have all the power and that's a game that's been going on for centuries.
Interestingly, we, the software community, are also unknowingly giving a huge helping hand to these guys, not just in Russia, but pretty much everywhere else.
The idealistic desire for 'freedom', the main motivation behind 'free software' is actually backfiring hard right now. We've open sourced so much technology that any student can put together powerful country-wide surveillance and control systems, offering incredible powers to whoever is the alpha male around there, for free...
Technological superiority was the reason why the USSR lost the cold war, but now we've handed those people all this tech for free and are actively maintaining it - from operating systems to databases, encryptions systems, etc.
Of course we only had good intentions, who would have thought...