What’s good is the clarity of the rule. Other attempts at rules become too subjective, perhaps.
So maybe it would be better if these companies actually followed the same rule as the government is required to, even if they aren’t currently legally obligated to.
Perhaps if they had to play by those rules, they would come up with a better solution than subjective moderation by a small group of employees.
I disagree. The difference between private organizations enforcing a moral code, and the government, is strong.
Ostensibly, if racists wanted their own youtube, they could make one. I see nothing of value in the further existence of the racists' mindset, but I do think it's important that there aren't thought police, for many of the same reasons that your average alt-right racist would yell about "freeze peach."
Of course, perhaps it isn't such a bad thing to have thought police, if there were open stretches of ungoverned land where racists could go live and start their own government. Beyond Antarctica though, that isn't the case. So for now, I think it's important to allow that separation between private and public rule.
So even if it shouldn’t be mandated that a private company do that, it’s reasonable to hold the position that this would be a preferable stance for the company to take.
They didn't really have much more for a long time, until the recent addition of ever-changing and heavy-handed limitations.