It's hard to tell from the article if this was jack-booted thuggery, or if some kind of due process was followed to shut down an organization causing actual harm. Anybody?
Does it matter? What the company was doing is legal in Canada, where the company was based (if I understand the article correctly). Unless if by "causing harm" you mean "not paying enough tax to the US", then I fail to see how this website was causing any harm...
If you are engaging in what is undeniably a business relationship (money/goods/services/written agreements/etc.) with people who are in a country, then it doesn't matter where you are; you can quite easily end up subject to the laws of that country. This is not a new idea. This is not a scary idea.
bodog got their domain seized because they thought they could engage in that sort of relationship with US customers despite offering services which were illegal in the US. This is downright mundane, and the amount of ignorant hyperbolic OMG FASCIST IMPERIALIST JACKBOOTED THUGS TRAMPLING ALL OVER ME hysteria it's generated frankly disgusts me.