That has to be the biggest two faced demand by google in the history of the internet then. I am going hold back on saying what i really think of them but they are a disgrace as far as i am concerned and so are a huge amount of laws associated with the internet.
Seriously, why? We're entirely free to allow porn if we want, it's just up to us to find another income source - mentioning "laws of the internet" is just ridiculous.
They're not saying "you can't post this", they're not saying "we'll sue you or prosecute you if you do this", they're simply saying "you can't post this and expect us to give you money".
It's their money and it's entirely their call who they give it to and who they do business with!
Would you support laws saying you're not allowed to choose where you shop? That you're not allowed to stop shopping somewhere if you object to what they do? Would you object to your boss saying you can't e-mail porn around and expect to get your salary?