Free speech is NOT the right to do or say anything in public in front of anyone. With that kind of argument, there is no reason to keep people from shagging like rabbits in public places, malls, or on the sidewalk during rush hour.
Free speech does not mean you can insult someone or talk rubbish to anyone who can hear you.
Free speech is meant to defend the right to think differently and talk about it in places and times where that discussion is needed.
Therefor, I agree that these pervs should have kept their grinding and pseudo-erotic key-banging to their own Guild house and their own forum.
I have no problem with what they are doing, I much prefer that they do it virtually rather than go rape a kid, but I do believe they should use restraint when they are not between themselves.
And I really don't get why they don't go to Second Life. Technically, SL is ideally suited for exactly what they want, WoW is most certainly not where they can get their kicks.
Finally, I'm sorry but Blizzard has no obligation to defend free speech on their own servers - it's a game environment, not a political forum. As such, Blizzard is totally within its rights to censor anything they so choose. They are not restricting your right to free speech, since you can go and spout your nonsense in many other places. They are, however, keeping their forums centered on their games, and that is perfectly legal AND desirable.
Censorship is something to rant against when it is done by the government, not when a game company tries to keep people on the game.