You are fixating on "private entities". This is completely wrong way to think about it. If I open "private entity" cake shop and then refuse to do business with someone based on protected characteristic, such as race or sexual orientation, I violate the law. Do you find this in any way impossibly controversial? Such law is understood to be necessary, because we as society decided that alternatives are not a good way to run society. Alternatives like jailing heretics or tying up people of certain sexual orientation to chairs and tossing them off tall buildings. Societies that do that are not good places to live even for people in no danger of being tied to a chair or accused of heresy.

It is like that, but with speech.

You balance openness of digital space against motivation for censorship. Such system will never be perfect, but at least it would make censorship based on political, racial, or identity lines harder. Places that anyone can join (e.g. Facebook) should have most stringent protections for speech, because they are digital equivalent to a public square. Small private forums should protect speech the least, because they are digital equivalent of a living room.

Why do you think that just because freedom of speech issue has "on the computer" attached to it, good practices and norms that allowed Western society to prosper can be abandoned?

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