You don’t typically see scripture quoted here on The Utility Belt, but this well-known passage contains a warning that MySpace owners News Corp. (NWS) would do well to heed. The huge social network lately has been blocking several of the widgets members use to personalize their profile pages – and the resulting uproar could allow rival services to steal MySpace’s most valuable users.

MySpace’s latest blocking incident occurred last night, when MySpace began blocking videos originating from Photobucket. The TechCrunch blog, which covered the outage, says that MySpace’s move affects millions of embedded Photobucket videos, but not images and slideshows. Indeed, Photobucket is not a small fry in the Web 2.0 world; the service made a splash in late February when it announced a Flash-based video editing feature that it’s offering in partnership with Adobe Systems (ADBE).

This is not the first time MySpace has asserted its dominance over the Web 2.0 community. Earlier this year the site blocked Imeem, Vidilife, Stickam, and Revver, typically claiming that it did so for security reasons. It also blocks outgoing links on music widgets from Amie Street, Indie911, MOG, Sonific and other services. Robert Young on GigaOM predicted earlier this year that this type of behavior could become more commonplace at MySpace, since Web 2.0 champion of openness Ross Levinsohn has left the company and the new honchos seem more interested in monetizing MySpace’s popularity at whatever cost. MySpace’s attitude toward Web 2.0 startups now seems to be, “We made you. You owe us.”

The approach is clearly alienating users. Worse, it’s alienating power users – the ones most likely to adopt the latest tools to spice up their pages and express their personalities. Tila Tequila, the MySpace-bred pseudo-celebrity who has 1.7 million MySpace “friends,” lashed out at the service last month after it blocked Indie911’s Hooka music player, and Photobucket users are upset now. A Photobucket blog post that announces the outage already has more than 300 comments, most apparently from angry MySpace users.

If MySpace keeps this up, it could be the beginning of the site’s slow decline. It certainly won’t happen quickly; the site has about 90 million visitors each month. But the site’s young denizens are a notoriously fickle bunch. Don’t forget how quickly they abandoned Friendster, the social networking pioneer, when the site became slow and stagnant. When that site began to act as if it didn’t need to fulfill its promise to deliver users a fluid, fun online social experience, they ditched it for the next hot thing.

By blocking so many widgets, MySpace is exhibiting Friendster-like hubris. Users embraced MySpace because it offered an open canvas on the Web – like a modern version of the collages high school girls painstakingly create inside their locker doors. Unlike other services (particularly Facebook) where members understand that they are participating in a more structured social space, MySpace users value the site for its whimsy.

Unless MySpace turns this around, it will provide ample opportunity for Microsoft (MSFT), Yahoo (YHOO), Google (GOOG), or some ambitious startup to build a truly open area for expression – and MySpace may end up joining Frienster as a cautionary tale of what happens when pride and a haughty spirit cloud a company’s view of what customers want.