The worst thing about this is that it introduces a built-in bias against websites that express minority views on controversial social issues.
This is because the majority of visitors to such a site will disagree with its positions, and some of them could get so angry about what they read that they block the site from their future searches. The result will be that Google gives lower rankings to sites that express minority views. This will happen automatically because the majority obviously outnumbers the minority and so will always win the battle of the block buttons.
The final result will be that Google promotes majority views on important issues in areas such as politics, religion, healthcare, drug use, gun control, abortion, the environment, etc.
i think a large part of this depends on the quality of the SERPs. if i search for "red widgets" and google serves up a page full of sites that don't apply, then of course i'm going to want to block them. but that's not the sites' fault. it's google's fault for messing up the SERPs.
if those sites then get penalised for that specific keyword, then okay. there is no damage done. because they didn't want to rank for "red widgets" anyway. but if google takes account of the penalty for other keywords too, as if it's some kind of sitewide demotion, then i don't think that is fair.
@londrum you're assuming there isn't a moral hazard with using "block site" as a ranking signal. People will abuse it, companies will abuse it. It may create a whole new form of spam for Google to take care of. As previously mentioned, this will create a lot of jobs.