I think any censorship in a video game is stupid. You should have the tools to block people but I don't want a game company swooping down like Big Bird and deciding what's OK and what isn't - especially without understanding the full context. That's a slippery slope.
I want everyone to be free to say whatever they wish without fear. If they say something that offends me, I block them. I want that control though and I don't want myself or others to be worried about how things are interpreted or the oversensitivity of a person with a victim mentality. I'll gladly accept being berated and harassed just to know that we can speak freely. I'd be happy to be called an autistic retard who should be lit on fire if that's what it takes to protect this game from censorship. For me, the evils of censorship are far worse than anything someone can say even if the censorship is well-intended.