Which raises the next obvious question - why isn't Google blacklisting these sites yet?

Well in Google's case it's easy, wouldn't want to upset that ad income. Firefox though absolutely should be blocking/warning of malware for sites like this. Firefox is more spin than substance these days, sadly.

But these are companies overwriting Google's ads with their own. Sounds like Google is directly hurt by them. Maybe blacklisting would get them charged with anticompetitive behaviour? (That would be really funny in a horrifying way if that happened.)

Why do you support private companies policing the internet? I'd rather be given the chance to decide what's good or bad for me by myself, instead of having someone else doing this proactively.

A warning would be welcomed, but nothing more.

Websites are still accessible if Google delists them.

That's akin to saying if I tore up the road leading to your house, your house is still accessible. You're not wrong, but you can't deny the power that Google has when it comes to access to websites. Furthermore, if Google started delisting some websites, you probably wouldn't even notice, which makes this all the scarier. There's a solution to be found that doesn't involve Google acting as some kind of pseudo-internet police.

At the same time, Google has a responsibility to their users. Their search engine is a list of what are likely to be the best results. If a website regularly spreads malware, is it in the best interest of Google's reputation to link to it?

Because Download.com doesn't actually give the user malware so Google Legal sees it differently than you.

Also, why do you want Google deciding who is blacklisted?