Yes.
> The law that requires Google to comply?
Yes.
> Google for complying?
No! How can you blame a company for doing something they are legally compelled to do?
> Or no one—is the right thing being done, the "pen" of the Internet being dulled back into a pencil?
The Internet has always been written in pencil. Pages stop being served all the time. The only difference is that now the index of the Internet is written in pencil, and every EU citizen has been given an eraser.
They're not legally compelled to take action on every request they get. It's just that it's too expensive to look at each request individually.
They have three choices. One leads to censorship, the other two lead to bankruptcy. Choose.