An alternative that you can implement right now, is to create your own custom search engine powered by google that gives you very deep control over which sites are excluded from the results. google has made it easy and surprisingly powerful: http://www.google.com/cse/
i think you are confusing google's custom search engine (CSE) and their site search. "Google Site Search" is for specific sites, but a CSE starts with the whole web, and you can tweak the weightings for certain sites or blacklist them if you wish.
if i recall correctly, you used to be able to start with the full web and refine by just blacklisting... now i see that if you try to make it past the step you linked to without entering any websites in the "sites to search" field, it gives the following message: "You must enter 1 or more websites."
i haven't read the docs recently, but it does appear that they have restricted this product since it first launched.
