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This IS a question broader than this one example, though. For example, what if some mega-chain bookstore decides to stop selling a book because they believe it to be offensive to most people. Is this censorship or so-called self-censorship? Should they have the right to do that?

With this example, you're conflating "self censorship" and plain ol' "censorship." Barnes and Noble or Borders don't produce content, they distribute it. By refusing to carry controversial books/movies/music, they are not censoring themselves, they are censoring someone else.
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I think it's much more accurate to call this "censorship" than "self censorship"


I think it's more accurate to not call it censorship. Just because someone has something to say doesn't mean a private company has to provide them the forum in which to say it, or the forum for you to obtain it. If Barnes and Noble or Walmart doesn't carry the book/music, whatever, because they deem it unpalatable, they're not preventing the author from selling it somewhere else in the work's current form. It's not censorship -- self, or otherwise. If they say "we'll carry it, but only if you bleep out the swearwords", that's still not censorship -- they're telling the author what the requirements are for selling something in their venue, and it's up to the author to decide if he/she is willing to change the work to suit. Now, if B&N or Walmart carried the titles, but modified the content without the author's consent (and/or knowledge) to fit their view of what's palatable for sale -- that is censorship.

Obviously, once the government gets involved (replace B&N and Walmart with Canada and USA, or some other countries), and it's a whole 'nother kettle of fish.