That particular approach is actually pretty sensible if you (as a law maker) want to get any results.
Otherwise everyone from small sites to Facebook would just shop around jurisdictions and formally operate their websites from wherever fits them best.
And if a service is used by citizens of your country it makes sense to scale requirements by the impact it is having on them.
This particular law may not be great overall but I've got no issues with this method. As a site provider outside the UK it's trivially easy to avoid liability (by blocking people)
Except we're not dealing with one of the web servers running out of reg-shopped countries where you can host just about anything. We're dealing with stuff that's legal as-is in most developed countries, including America. Aside from the basic question of whether it's ethical to regulate in that way (you're correct it's practical, but there are plenty of things that get results but are morally wrong) it doesn't bear on this case.
I think this is a heavy handed law which entrenches big tech companies.
However I'd argue that from the UK perspective any of these developed countries would be considered reg-shoped.
They don't consider other countries' laws as sufficient to protect their citizens (which I probably wouldn't agree with).
I'm struggling to see a better approach to make sure any law applicable to online services is actually effective.
It seems like there are only a few options:
1. Only pass globally agreed upon laws (which is basically nothing and not realistic)
2. Only regulate domestic providers (which would severely disadvantage them and not resolve the underlying issues)
3. Block all foreign services (which is even more drastic).
In the end a states' power is tied to its territory and the people living within it. If not being active in that state at all releases you from it's laws I would consider this appropriate.
This is on the UK to fix (or not fix) for themselves.
Otherwise everyone from small sites to Facebook would just shop around jurisdictions and formally operate their websites from wherever fits them best.
And if a service is used by citizens of your country it makes sense to scale requirements by the impact it is having on them.
This particular law may not be great overall but I've got no issues with this method. As a site provider outside the UK it's trivially easy to avoid liability (by blocking people)