I can see the obvious upside for countries (especially those who have strong economic ties to China) in not having their athletic representatives to be making political statements and endangering those relationships. Shut up and run! But the Olympics is always about politics, and if you’re going to have a free nation you have to allow freedom of expression. And that can lead to Flo-Jo or someone more radical.
Also, while I support the right of British or American athletes or whoever to go to China and criticize that nation for Darfur/Tibet/labor standards/Yao Ming’s inability to run the fast break, I think it’s easier to criticize a foreign land. Imagine if our best athletes used an Olympics in New York to question the war on terror. That’d be truly courageous activism.