Singling out Google for not opting to exclude a fifth of the population of this planet from their products is a bit overkill. I'd rather they offer choice to the Chinese people on their terms than opting to not be in China at all. Google has huge stakes in China with Android, related production of many Android devices, and a lot of their other products. I imagine pulling out of China is not very practical for them at this point nor is selling phones without Google search.
When I was still working on search Nokia Maps (now Here maps) we had to comply with all sorts of rules internationally, including for China. In addition to being weird about certain POIs (e.g. Tien an mien square) we also had to deal with their obfuscated GPS coordinates. They use some weird shifting algorithm that you have to license from them. The point is not the algorithm (you can find it online if you dig hard enough) but the fact that you had to talk to them to get a license. It's a control point for them.
Another weird thing was that Iran insisted on referring to the Gulf as the Persian Gulf. One nice edge case there is the inflight maps of planes flying over their territory.
The point here is that doing business internationally is hard and taking the moral high ground basically means not doing business with a lot of countries.