Personally my view is that the 'physical' Blackwaters of the world haven't demonstrated an awful lot of adherence to the moral requirements associated with such work, so why would the virtual ones do the same? If you sanction a company with the ethics of Blackwater to do offensive work, do you really think they only side they're ever going to fight on is yours? Do you think that they'd represent your interests, or theirs, and do you think there'd be any hope of the kind of transparency or limitations that you'd at least expect to see in a state run equivalent?

However, unlike physical violence, there's not as much "inherent human moral knowledge" about computer crime/war/terrorism. It's pretty obvious to anyone (including Blackwater shooters) that shooting people is wrong, all things being equal; it is necessary in certain situations, but is to be avoided if possible. Some kinds of shooting are worse than others, and there are lines which most people wouldn't cross (shooting obviously unarmed people, children, etc.), even if ordered to do so.

With most computer crime, it's not so obvious who is being hurt and how much; there's also no primate/reptilian brain response to most of the activities themselves, only their consequences.

There's also much more potential to use "able to do digital violence" to influence business and politics within a stable nation state than to use physical violence. Organized crime only really can operate in marginal communities, at least through violent extortion -- in more developed places, it sticks to providing unmet (illegal) needs like drugs, gambling, prostitution, etc., or operates at a sub-organized level.

There's really nothing in "inherent morals" of people, or in cultural values, which will prevent using a "digital blackwater" for political or business ends.

If someone goes down this road (and the Chinese appear to have already, and possibly Russia), everyone else has to, but the world will become worse overall. Better for hackers, perhaps, as a subset, but I'd be fine with having a little less money and living in a less-Gibsonian world.

This isn't MAD, this is constant low-level warfare waged by a foreign power without any US response except for monitoring and sporadic defensive efforts. The problem with a counter-offensive, esp. one waged by proxy private sector forces is that, first of all, the US is continually fighting the last war over and over (oh yes, let's invade Libya and setup democracy there... ), second of all even if we can plant detonation devices in Chinese infrastructure like they most certainly have littered in ours (who knows how many electric grids they could shut off at a moment's notice) this doesn't prevent their offensive efforts at all. In fact, the only thing that can prevent theft on a large scale is penalizing that theft, which certainly no current administration is capable of doing (notice the long standing list of promises regarding IP protection that China has reneged on). So really the only solution here is to innovate much more quickly domestically (including whatever private sector partnerships are appropriate via DARPA, etc.) and to continue to develop offensive capacities (which undoubtedly exist but given the classified nature of such, it is hard to know quite how well developed or capable they are). Undoubtedly we should also try to knock off Chinese government servers periodically as they do to ours just to be certain that we can -- and a private Blackwater might be just the ticket.

Oh yes, I used to work for the DoD.