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I'm worried that this site blocking feature could cause some websites to be unjustly demoted in Google's rankungs.
For example, if a site takes an unpopular position on some controversial political or social issue, then many of its visitors could get angry about what they read, and decide to block it from their future searches. The algorithm could take this as a sign of low quality content and lower the site's rankings. The final result would be a kind of censorship of websites that take minority positions on controversial issues.
The blocking feature also provides opportunities for organized efforts to hurt a site's rankings. This could be done in the same way that hate mail campaigns are organized, as when certain political and social organizations mobilize their members to sent hate emails to the owner of a particular website. In the same way, members of these organizations could be mobilized to block certain websites for the purpose of hurting their rankings.
For these reasons, in my opinion it is a serious mistake for Google to incorporate this site blocking feature into its ranking algorithm.
I believe this option appears when you've clicked on a search result and then used the back button to return to the SERPs.
I'd guess that the +1 Button gets put up against this sort of thing. Maybe. The "block site" option applies to the entire site, but the +1 is per-page, so I don't know...
But Google is adept at spotting different signals in different verticals and makes allowances depending on topic. My guess is that in the case of the political arguments these signals wouldn't be used to affect the rankings while perhaps retail sites might see more impact.