As another poster FR bans posters regularly. I think you’d agree it shares whatever “public utility” benefits that Twitter has.
That's true, and I would expect, other circumstances aside, that from a legal point of view the same safe harbor exists, although it appears in some instances copyright holders may not have held the same opinion.
From a public policy point of view, and the view of the users, web sites with very large market share are often held to different standards than web sites oriented to a particular viewpoint. There is also often a politically correct view of these matters from regulatory agencies as well.
I doubt the Justice Department would lift a finger to challenge the suspension of Milo's account, but should a similar large scale web site decide to, say, suspend everyone who advocated for gay marriage, or refuse, for example, to accept ads for same sex dating, then the governmental response would be quite different. And the argument that the web site is a private business and can have whatever terms of service its wants would not be an effective defense.
Twitter will ultimately have to answer to the marketplace, and their relevance and value may be either increased or decreased by their choices as to what kinds of messages they allow, and who they allow to use their service.