I don't think they created it per-say. I think they, and probably most of the executives in the industry, missed just how much a powder-keg chinese censorship is, and how political doing live international (or even national) sporting events can get. Everyone in the west is pissed at blizzard for cowing to China. China is obviously in the wrong here, because they're the ones threatening to kick Blizzard out of China unless Blizzard does what they say.

This is a risk that no matter how Blizzard execs managed it, if China pushes that lever all of their profits turn to zero. I think now any company should start to think twice about the risks of operating in China. I think ultimately this will fizzle out, unless the players don't stop protesting, at which point they'll have to stop broadcasting to China, and probably stop operating there.