They're probably demonstrating that the Chinese government can leverage nearly the entire Chinese internet userbase to DDOS anyone they want, at any time, and the easiest protection mechanism is to block Chinese IPs. Which is exactly want they want.
Maybe they could -- it might not be a wise move, particularly given the political tensions which obviously exist already, and it would certainly be inflammatory, but it may well be technically possible.
Github serves HTML over HTTPS, which means that if they started putting a few well-chosen words in Chinese in every HTML page served to China, the only thing the government could easily do about it would be to block github from Chinese users entirely -- which they've already tried once, and didn't keep up, presumably because cutting off github for more than a few days poses problems for their own domestic software sector.
> leverage nearly the entire Chinese internet userbase
Well, not just Chinese users. Anyone who was accessing a site that used Baidu's analytics, regardless of where they came from. Things like this remind me why I like Piwik so much.