Too bad. It was a great complement to the increasingly unreliable IA, whose list of blacklisted websites just keeps skyrocketing for opaque reasons. I'm guessing it's still available internally, along with snapshots going far, far back in time.
This could be due to site owners contacting the IA and requesting their site be permanently removed from the archive. It's not as easy as pressing a button, but it's not difficult to have your site removed.
I don't think that the IA itself makes editorial decisions as to which sites to include and which to blacklist. It's more likely that the blacklist is a voluntary opt-in thing...