Jed -- quite right to name-check Salman Rushdie. The crucible for the European will to liberty is the howler you quoted: "Freedom of the press and of artists must be protected. But it ends where you start trampling on people's dignity."
By this standard, Mapplethorpe and Serrano would have been run out on a rail long ago. Marilyn Manson, who is a very good artist if you like that sort of thing, would be banned out of business. Whose dignity counts? The trouble is that "people's dignity" is a legal netherworld when definitional reliance is placed upon the indignant. That problem is illustrated by Salman Rushdie, someone who should know about the dilemmas stirred up by dignity and Islamist censorship. Writes he, back on December 10, 2005 in the Times of London: