Internet content filtering in education

I've worked in education for a few years now and I think it's pretty safe to say that colleges/universities need content filtering on the Internet, however when does content filtering go too far?

In my educational institute we've always had social networking websites, Youtube, Online file storage sites etc. blocked for all, this has always been like this and we've kind of learned to accepted it, but should we accept it? Mashable did an interesting post regarding the openness of the Internet and how it can improve productivity at work (Link to Post) and I totally agree.  It's just a shame that the powers to be don't care/not interested enough to do anything about it.

Now as times move on with the integration of social media in education and influx of smart mobile technologies, is it finally time to loosen the belt? especially as students in the UK will be paying up to £9000 per year for the privilege of attending a Higher Educational institute (BBC)

I feel that Higher Education students will start to call the shots and demanding open access, after all, educational institutes are like any other business, they have to keep the customers happy.

In no other industry would we accept this, but in education we do, strange....