It's also worth noting that all this was made in the 90's when things were (relatively) peaceful and stable. This was before 9/11 and all the hysteria that followed in it's wake, before it became obvious that certain news agencies were considerably less than objective with the facts. These days it seems old-hat, overkill even, but for back then the point really needed to be hammered home. A lot.
Plus, like Jan says it's about the process. Without things like this you'd be scratching you head wondering how the people back on Earth could just let some xenophobic nutter do whatever he wants. This is pretty much the culmination of things that have been slipped in here and there since season one.
Even before Santiago was knocked off there was rumblings of what was to come. Growing support for pro-human groups like HomeGuard, "loyalty tests" enforced by Psi Corps, Psi Corps endorsing then Vice
President Clark in violation of their charter, the bitterness and paranoia from the Minbari War and the increased suspicion of alien collaborators (why else would they just surrender?)
Then later comes the introduction of Nightwatch, the Ministry of Peace, the Ministry of Truth, passing laws against "sedition" among the civilian populous, creating a security scare after the incident on Ganymede, declaring martial law, bombing civilian targets on the Mars and Orion colonies. And now with this we're shown how completely the "truth" can be manipulated to re-enforce and justify everything that's going on.