Here we have a perfect example of the narrow-minded thinking that is so predominate in South Africa that it has seen us come last in all kinds of service delivery surveys.
Why do you make this out to be a South African "problem"? Have you worked overseas for a lot of companies? I worked in NZ for a year and the company I worked for adopted the same attitude. They restricted sites just as the South African companies do.
Lets look a little further at this site blocking. Big companies will probably do it because of the shear number employees and the bandwidt and employee time costs. Smaller companies are more likely to adopt a relaxed attitude and trust the employees more. Unfortunately, it's the smaller companies that will get hurt much more if an employee starts goes AWOL.
The costs to a business because of Facebook (as an example)
1) Bandwidth costs
2) Lost employee time
3) Internet delays for other users using the internet for work related activities.
You say "Trust the employees" but facebook, just like WOW, Trackmania Nations and even drugs is or can be addictive. Just look a couple of message back at the developer who lost his job because he could not stop using Facebook. IMO, it's better to remove the temptation and just let people get on with work. Hell, I spend about 30 minutes on MyADSL every day and that is probably 20 minutes more then it should be so it also has a certain amount of addiction.
One doesn't say "Just leave the drug addict to sort out his/her own problems", why is an addiction to something else any different.