Probably the same way they’ve blocked torrent sites etc. DNS blocking at the isp level. Easy enough to get around for anyone tech savvy but would wipe out 90% of the average users.
A lot of the people sounding morally outraged are well and truly addicted. Witness a lot of people resolutely screaming "I'M NEVER GOING BACK TO TWITTER" only to quietly go back to twitter almost immediately.
If Australia banned twitter, you'd have celebrities wandering the streets, "Anyone! Does anyone have a hit of twitter? I'll sell my house and car to you, just let me angrily tweet about one thing!"
Agreed, I haven't used twitter since the acquisition other than to peek in and see the shitstorm, planning on deleting my account entirely soon. It feels like we are on the verge of a major shift of the internet again like back when Digg/MySpace were around. People need a reason to move and the more attention stuff like this gets, the more likely it is to happen. The only thing that worries me is that people seem a lot more gullible nowadays and tend to trust more than they should, not to mention the culture wars the politicians just seem to love stoking the flames of currently. We all need to calm the fuck down.