They absolutely have the technical ability, and now they have the legal ability as well. If a page is http, not https, then they can arbitrarily modify the page in transit. Otherwise, they can simply decide not to serve pages from any site they want.

> On the other hand, I'm not opposed to censoring some things, like porn.

This is how censorship tends to start. Porn, copyright, and/or terrorism. You are opening yourself and your country up to a world of abuses by those in power once you start letting them censor. (Also, why is it any of your business or mine if other people watch porn? And if it is, the path to change practices we disagree with is through dialogue and education, not authoritarianism.)

Porn has horribly messed up our society. Have you been watching the news and all the sex abuse scandals? Plus all the stats regarding broken families, abuse of minors, etc. It's just all bad, and all due to porn. Cutting off porn would fix a whole lot in our society.