1. It is because we/I expect better from Google. Google has such a huge responsibility, being the gateway to the world's information, and we trust them with that position. For-profit and deliberate blocking access to information erodes that trust. I would not care about other companies doing this, but seeing I care about Google doing this shows me that Google has a great PR/goodwill they've build up over the years. With this move I am left wondering if that is deserved, or if it was merely manipulating me for fanboy profit.
2. I think that is because they love working there, they hold their employer to a very high standard, and they don't want to take a pay cut to work for another (perhaps US-only) company with morals more aligned to theirs.
Doing (or even thinking about) ethical business, puts you at a disadvantage over those that care more about profit and increasing their power. Losing prospective profits by doing the right thing is not a popular choice for a commercial business, so the incentives are there to just sell out your soul and go along with censorship (or spying on your users). For Facebook, this went on for years, until they found themselves in a mess. This mess was the result of 1000s of decisions made by all employees (not just upper management). I commend Google's employees for standing up for their beliefs and vision for the company. Only in a very Ayn Rand world is this sabotage. I am sure the big chief in charge of foreign markets views it as sabotage, but luckily Google is not run by only Eric Schmidt's.