Kids will see porno, whether its blocked of not. It's the same as people being able to download torrents after the pirate bay was blocked or making drugs illegal doesn't stop people getting drugs.
This is a deeper issue that can't be solved by closing off parts of the Internet. We need to improve society in general, not make it harder for the people who want to seek this sort of thing out.
There will still be a large expenditure on the side of the government, as is with most things in government. Such e penditure would be best spend influencing innovation and business, not requiring a sector to implement mandatory technology which probably has large costs.
It seems like the consumer will really foot the bill here. It seems a lot of decisions are made which cause the average joe to spend less, which isn't great for the economy.
My point is that it's a stupid idea that reflects a profound naïveté about the internet as a social phenomenon.