It is not uncommon that companies, schools and universities block social networking services, video and photo sites. Blocking is usually a respons to mis-usage of those tools: tools are used in a wrong way or at inappropriate times. However you couldn’t be more wrong than by blocking them. By blocking those tools you do not help the people that using them in the right way at the right moment and you do not help the people mis-using these tools since they will probably will have a work around (or an alternative) in a few hours.
Blocking is natural behavior
If you look in the past you can see that the blocking is a common reaction: first there was a block to call outside the company, then to call international, a block on email, a block on visiting websites, a block on instant messaging etcetera etcetera. A lot of things were blocked and most of them were unblocked after a while. Why? Because all these tools are useful in a way. The only thing you should do is to create a clear understanding with each other how to use these tools properly to prevent any mis-usage of these tools.
Same goes for all the tools that are being blocked nowadays: social networking services contain a wealth of information and provide not only a big fun factor, but also tons of free marketing and consulting possibilities and an awful lot of new possible employees and customers. Do not block these kind of tools, just use them for your advantage. You cannot expect from employees that they will spent 100% of their working hours on their work. That is not necessary, let them spent some time during working hours on social networking services and other tools, there will be a return on investment if employees use it properly.