Most retailers in London already get their deliveries during the night, but couriers will not be able to do this for Joe Public, so I would imagine they'll avoid London like the plague for the next few weeks
The problem is the increase to security. The suppliers say deliveries will take too long, with more parcels being checked, and it will cause them less fuss to stop deliveries altogether for the duration rather than dealing with customers complaining of late deliveries.
Parcelforce have put a £1 surcharge on a parcel for delivery to most of London and Royal Mail are suspending delivery garentees for recorded and special delivery. Anything for delivery in the Olympic area must go via DHL who are the designated carriers.
Whether or not it is ridiculous I can only tell you what I've been told. It could be that they have been made aware of the security debacle and do not want to run the risk of the parcels being damaged by greenhorn security staff causing them unnecessary costs in replacements. We're not talking a few bob here.