It's been a while since we discussed censorship here! That was always fun...
There's no reason why this should be this big an issue. In all honesty, I'm glad there's censorship in a game meant for a wide audience. Sure, we could have set up a password protected censorship block or whatever, but when it comes right down to it, what's offensive and what's not is a thing that's different for every person. I personally am offended by jokes set on the mentally handicapped, but I can handle songs about grisly murder and tons of sex and songs with more f-bombs than the South Park series. Others may find songs that talk about religious ideals different than theirs offensive.
It all comes down to the parents, and setting up a censorship system that would appeal to everyone would be almost impossible, considering all the songs that are downloadable and how much obscure stuff is on the game that people probably wouldn't be able to instantly recognize as offensive.
At least they tried by crossing out words that you can just sing anyways.