I have been to China many times, in fact, I have been in Chongqing many times, and I have seen the Great Firewall in action, as well as their attempts at censoring blogs. You're over-rating their ability to clamp down on stuff. Their censorship has always been hit or miss--stuff will be blocked on one ISP, but not on another, or in one city, and not in another. Obviously for some well known sensitive topics it's pretty good--so if you are blogging about Tibet, they will eventually notice that, and come and have a chat with you about it.
Your idea that they can get ahead of a breaking story and block it in the first few days is really over-estimating their capability. They simply can't do that. That is what happened here--in the first few days the story broke there was hit and miss censorship. They did in fact take stuff down, sometimes, on some ISPs, and then put it back up, and then take it back down. That is just how they work--they don't really know what to do in a situation like that until they get their marching orders. It takes a few days, if not weeks, for them to figure out how to respond. Which is quite different than, say, Tibet, where they all know already how to respond, because it's not a new issue.
So, basically, what you described is what happened in March and April, once the wheels had started moving, and everybody had their marching orders, and they were starting to get out ahead of the story.
But back in February they were as confused as anybody else as to how to respond, and by the time they got their PR machine engaged the story was way out ahead of them. Yes, ever since then they have been managing it--and no doubt Bo's enemies saw it as a great opportunity too dog pile on and finish off not only him, but his ideas and such.
My point is just that by that time they didn't really have the option of suppressing the story and doing nothing, people wouldn't have accepted that. They had to do something, and they have since decided WHAT that is--and the bit about discrediting the whole Chongqing model is obviously part of their spin.
But the part about people in China getting mad about people who think they are above the law, and that anger scaring the shit out out of the party, that is very real.