I think every government can put up a regulation against the use of internet. All of us acknowledge the values of freedom but at the same time frown at the abuse of such freedom. In security prone places like Iraq the internet can be used to sabotage the efforts of peace building. I always advocate for peace and freedom (with responsibility).
This should be stated clearly in the constitution of the country. The freedom of using the internet has to be limited with some kind of restrictions in order to stop cyber crimes, racism, abuse,...etc. Yet, stopping the whole service for political reasons, I don't believe this step is for the best interest of people. Its worth mentioning here that Amnesty International stand against stopping the internet, as they considered it a way to shut the mouth of people.
No, i don't think that they need to do so unless their is a great danger facing Iraqi people because intent cut might harm so many companies and people,since most companies are extensively using internet in their daily transactions