Reason behind this. Google says it is doing this to manage contents locally. If Google receives a removal request for any content, the content will no longer be available in that area.
How the change will affect blogs. There will be no as such changes to blogs content. If any content will be removed, it will not be shown to a particular area where it violates the terms.
Now, the main thing which is to be considered due to the bloggers domain redirection is How it will affect Search Engine Optimization.
After this change, Google crawler will find the same content over different domains. Thus to crawlers it will appear as duplicate contents resulting in loss of page rank Google is still trying to minimize the affect as much as possible but still for now its gonna hamper your search engine rankings. If you have put an article on "blogging", the same content can be find out on [blogname].blogspot.com, [blogname].blogspot.in, [blogname].blogspot.com.au and many more. This looks like content duplicacy to crawlers affecting your sites health. Google needs to consider this as soon as possible.
Alexa ranking affected. Well, if your site was earlier visited through .com 20 times a day, it may now be visited with .in 10 times and .com 10 times distributing your ranking to 2 different domains resulting in loss of your ranking. You yourself can check that for .com, .in, .co.uk, or any other domain. They are all different.
Will it affect custom domain? Nope. Custom domains will not be affected and this is the best way to negate the effect of this Google practice. Buying a .com will ensure all your visitors from that only resulting in higher page rank and search engine rankings. May be you should buy a custom domain. And me too.
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