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Usually Russia don't play that smart. Wondering how would they replace those services.

It would actually seem like an ideal way to force the adoption of native cloud service replacements (regardless of quality or competitiveness of the offering). Russia has tended to go that way with most things, whether Mail.ru, VK or Yandex. Russia has a very long history of being insular like that and the powers that have dominated Russia the last century have a vested interest in keeping it that way.

The only reason why local hosters are making money is local personal data law which restricts that PD of russian citizen should be stored inside Russia, because their prices and level of service is non-competitive to i.e. DO or OVH.

I wouldn't say the Russian government cares a lot about its main players, like Chinese do. Actually, they've spent millions building Sputnik — a government owned search engine that nobody used.

If they were just being protectionist, I'd be able to understand them in some way. But it's deeper.

Your thought is out of the box.

so basically what china's doing