No one can predict how it will play out, but censorship technology has only improved since Google left. Having another search engine to choose from doesn't necessarily mean Chinese citizens will have access to more information, it just means that the Chinese government will have more avenues to disseminate misinformation. I could easily see millions of Chinese citizens being lulled into a false sense of security by Google's presence and fall prey to government watchers.
Believe me, I'm greatly disturbed by China's censorship. Talking shit about my own government is a right I can't imagine losing, let alone access to the treasure troves of anti-US thought. I also know how terrified I would be if my own government had the ability to lock down information. Imagine Trump and the GOP having that power, even for 4 years, and what damage they could do. (And GOP voters would make the same argument, of course, the other way around, and already do fear that tech companies are censoring their freedom of thoughts).
So believe me, I'm not trying to defend China here, nor am I trying to shill for the project. But it's not my lane to opine on, and I had hopes that if the project did launch, that some good could come out of it. But your concerns are absolutely valid too.
Just because someone thinks their company shouldn't engage in a specific project due to ethical concerns, that doesn't mean they're speaking on behalf of the people affected by those ethical violations.
It's perfectly reasonable to want to stop the project due to the ethical principles alone.
It however presumes that they know enough about the situation to apply those ethical principles to decide what's best for the people affected.
It's hard to find an analogy for this, but consider milk powder. Due past scandals about contaminated milk powder, Chinese parents who can afford it prefer importing milk powder from overseas. Now suppose China bans halal products. Should a milk powder manufacturer who previously exported both halal and non-halal milk powder to China continue to export their non-halal powder, or should they stop exports of both product lines to avoid complying with what they believe to be an ethical violation, knowing full well that Chinese consumers will then be exposed to the hazardous milk powder manufactured domestically?
The alternative to Chinese people getting censored search results from Google isn't getting uncensored search results from Google, it's getting censored search results from Baidu.