Yeah, it's something I have a little trouble with. Even extreme examples like "Human Centipede 2". I think the film is appalling and should never have been made, but I also don't believe in restricting people's right to make and watch crap. I mean, if I was in charge, Jersey Shore and all it's ilk would be banned as obscene.
I rationalise it by saying that the Oz gov't (or UK gov't - the system is near identical) say "This goes against what the people who elected us believe in, so it will not be available for sale here." You can still quite legally import, own and use it. You just can't distribute it. Of course that's all justification and doesn't really change the fact that it is a bit... oppressiony.