Wow, I couldn't disagree more on this point. One of the great things about the Olympics is that it's without politics [er... in this regard].
I don't believe that it's acceptable to say that places with different cultural values make unsuitable hosts. Human rights criticisms were also levelled at London, and even more at Beijing. In general, the Olympics (indirectly) does a lot to raise awareness of human rights and it's good that it is able to do this by spanning the breadth of the world's culture.
Hosting the Olympics in Sochi will allow individuals' achievements to be celebrated within Russia without the permission of politicians and without the stigma of prejudice.
I hope instead that gay participants will be encouraged to come out and raise awareness in the relative safety of the occasion: since Godwin's law has already been invoked, I would compare the situation to Jesse Owens at the Berlin Olympics.