No, we really don't "need to step back before we balk at the BBFC's decision [to ban Manhunt 2]". It's censorship, it's nonsense, it perpetuates every hack stereotype about games and violence, and it only further reinforces the UK's growing reputation as (and I can't believe I'm typing these words) a "nanny state".
(I actually thought the original Manhunt was underrated. It pulled off what Eli Roth has been trying to do and, largely, failing: to create convincing non-supernatural horror that, while improbable, is disturbingly possible. It being interactive has a lot to do with that.)
Sure, kids shouldn't be playing Manhunt 2. The point of the series is to hold up a mirror to the player's own intentions and expectations of the "game" in front of him or her. Kids wouldn't get that. I'm not sure many teenagers even would; you need to be past that point in your life where you become a little more self-aware about your actions and behavior for this to make sense. If you are, however, I don't want the British government to deny you that sort of experience because of the sort of sketchy, poorly operationalized nonsense that Craig Anderson and the like are peddling.
It's a huge disappointment that Ars Technica is buying into this.
Edit: Hey, just found a very nice demolition of the whole gaming censorship thing from the Eighth Circuit Court of Appeals. It mostly gets into how games should be protected speech, as they're storytelling and artistic media, but it also echoes the decision by Judge Kennelly that the evidence of violent video games making you all crazy is questionable at best. At their worst they might make you temporarily more "aggressive". Of course, there's another word for that: