Can the technique be used to bypass content censorship (e.g. in China)? Can it be made resistant to detection?
Steganography can be used to hide data in clever ways, but it isn't a substitute for encryption -- anybody who knows whatever trick you used can extract the payload. You could always encrypt the payload, but all you're doing is giving your adversary another (trivial) hoop to jump through when you could've just encrypted the message to begin with.
> Can it be made resistant to detection?
Yes and no. There are some clever steganographic techniques that take advantage of PNG and JPEG implementation details to foil basic entropy checks, but anybody who knows the algorithm can trivially extract the payload. In other words, it's security by obscurity, not by any sort of strong cryptographic property.
Wouldn't "an encrypted message that no one is sure you sent in the first place" sometimes be more useful than "an encrypted message that any eavesdropper knows you sent" in oppressive-surveillance-state scenarios? (It seems that, if you find some subset of bits in a JPEG/PNG that normally have random distribution and don't affect the image that much, putting an encrypted message into those bits might be indistinguishable from a "completely normal" image even to a well-informed attacker.)
> without massive amount of false positives
China, at the very least, has no problems with this!