There's a lot of speculation in that statement, though I know little of internal politicking within Russia. I think that the explanation via Jacob is a pretty sound one; LJ doesn't want its paid value-added model circumvented by this Russian site, that then chose to use Tor to breach LJ's Terms of Service, and so the community has to bear the brunt of it.
I find it unlikely (but not impossible) that LJ would be consorting with a Russian cover-up. LJ as a business has a long history of hosting dissenting opinion in from countries, including Iran, China, Kazakhstan, and other speech-is-not-free countries. As a result, many of these countries block or restrict access to LJ as opposed to "being in concert with" LiveJournal. This may even take the form of bullying local ISPs to log accesses to certain IP addresses, or dropping a transparent proxy in front of outward accesses to these sites, as a means to the same end you describe above, and either of which requires no help from LJ to execute.
: hosting, not sponsoring, just hosting