I thought this was the coolest thing in '96. All these years later it just reads like self parody. The Internet is very much a part of the terrestrial world, and governments do possess methods of enforcement we have true reason to fear. It sucks, but grandiose proclamations don't change that.
There was a tremendous amount of techno-utopianism in the early 90s. The internet & computers would bring peace, love, erase national borders, enable society to be utterly transformed into a global place without work, strife, etc.
Mondo 2000, early Wired, and Rushkoff were big proponents of that thought paradigm. I see Barlow's essay as an offshoot of that paradigm.
We're still very much at the beginning, and it's far too early to say anything like that. If at all, we've been slightly thrown back.
I still believe everything you dismissed as "techno-utopianism" to be possible one day. Social change rarely happens overnight. We have to work and fight for it.
Oh, there's a lot of possibility out there and some of it has been realized. But, unfortunately, there was a lot of ignoring human nature going on at the time. People are simply a lot grittier than the future of the time was portrayed.