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This idea is actually not as crazy as it may seem. Copyright lobby is usually just one step behind the Chinese policies of restricting access to the illegal content, with the only difference in definition of illegal. Chinese have developed such tool, [1], and were planning to install it on every new computer sold in China. But later scaled down it's use.

[1] http://en.wikipedia.org/wiki/Green_Dam_Youth_Escort

Better yet, get rid of general purpose computing for civilians altogether. That's one reason I support Android; if most people end up on locked down platforms like iOS or WP7, it becomes much easier to pass and enforce draconian laws. Remember the CBDTPA (http://en.wikipedia.org/wiki/Consumer_Broadband_and_Digital_...)? It would actually be feasible if everyone were using iPads.

Well, if you were one of the major owners or CEOs of a recording company what would you value more - your own profits or the human rights of the unwashed masses?