Banning a site like Orkut would be an extreme step. Some people may use such sites in highly unacceptable manner but not all follow the same. Orkut has been helpful in tracing old friends, colleagues and a portal to be in touch with them.
The communities should be screened properly and a strict vigil should be kept regarding derogatory, defamatory and other such remarks which may hurt sentiments and/or act as reason for miscreants to carry out their anti social acts.