Is it possible for the miners to collude to blackmail a single wealthy address? Imagine if a few miners who together control more than 50% of the network hash power decided to charge higher transaction fees just for addresses containing really large sums.

For example, this address here has 69,471.08443061 BTC:

http://blockchain.info/address/1HQ3Go3ggs8pFnXuHVHRytPCq5fGG8Hbhx

Now the miners could decide to reject any transaction going out of that particular address (no matter how small the amount) unless it included a 25% transaction fee. You could call it extortion.

Question:


Is it "illegal" (see below) under the rules of Bitcoin?
How would the rest of the network detect such a problem (given it involves only one particular address)?
How would such a problem be resolved?


By "illegal" I don't mean the network would reject such behavior, because that it wouldn't, but that it would be rejected by most participants in the Bitcoin economy based on an implied understanding of what's fair and what isn't.

[UPDATE]

OK, let's say the mining cartel publishes their new policy on their website and word goes around.

Also, as an incentive to the rest of the participants in the economy, it is announced that part of the higher transactions fees will be distributed to everyone. This is achieved by setting up a single address (a la SatoshiDice) where you can send any amount and in return you'll receive the same amount plus the bonus. You can only do this once per address, because the program checks that the funds don't cross the same address twice.

You could call this a wealth tax or a "Robin Hood tax."
I think your update changes the question significantly (probably too much for a SE question), but the answer is still essentially the same. In order for a miner to prevent a specific address from moving their BTC, they must not only decide not to mine the transaction but they must also convince at least 51% (most likely more) of the hashing power to not only not mine the transaction but also to ignore any block that does include that transaction.

First of all, I think that this is highly unlikely. Because:


Any combination of entities with >51% of the hashpower also has a very vested interest in Bitcoin. And deliberately allowing extortion would be against the interests of Bitcoin.
Any combination of entities with >51% of the hashpower has other potential ways of exploiting the network, which are arguably a lot more profitable.
The bribery incentive you list wouldn't really work. There's too much anonymity in the system. If you had an address that would give me back 110% of what I sent it, I would send it some money, launder the results into a new address, send it some more money from that untainted address, send it some more money, rinse and repeat.
Even if the "cartel" has 55% hashpower, there is a 1.8% chance that the minority miners could get six consecutive blocks mined. This may not sound like a lot, but if the extorted party just kept pushing trasactions out there it would only be a matter of a few hours before one of the transactions got six confirmations. So, the cartel would either have to be willing to break long strings of blocks (completely putting the network in jeopardy) or they would have an overwhelming supermajority of the hashpower (>90%).


So, in answer to your subquestions:


Is it illegal? Well Bitcoin doesn't have laws. If you mean, "would the protocol allow it?" Sure. A known weakness of the protocol is that if any entity controls a majority of the hashpower then there are some attacks they can make. Luckily there are some checks on this, notably the above comment: that anyone with a majority of the hashpower also has a lot invested into the health of the network. The deliberate limiting BTC Guild did on itself a few weeks ago shows this in action: the very entities that could obtain 51% hashpower are the ones most interested in making sure that no one obtains 51% hash power.
How would it be detected? In your modified scenario, it would be public knowledge. But even if someone tried to build a silent conspiracy, it would be pretty easy to detect if they went through with their threats: there would be orphaned blocks. And all of the orphaned blocks would share two things in common: they would all contain the extorted address and they would all be mined by minority miners. It would be pretty easy to figure out what is going on. Of course, you couldn't stop someone from secretly making threats, but detecting someone carrying out the threat would be easy.
How could it be resolved? Fundamentally the network is controlled by a majority of the hash power. If a supermajority of the miners decided to block an address, then there is no resolution: the majority rules. In a way, this is a feature. No one with the majority of the hash power would do this indiscriminately: it would jeopardize the network. But if the network determined that a particular address or addresses was a threat to the network, then the miners could band together and defend the network from that threat.


To expand on #3 with an example, say that a child pornographer publicly advertised some kind of service and accepted Bitcoin as payment. If, either out of altruism or media pressure, the majority of the hashpower decided to forbid payments to or from that address it would certainly be possible. (Of course, it would then become address "wack a mole", but there are some ways around that if the network could agree.)

TL;DR: The point being that if the miners collectively agree on something, yes, it is possible to effectively control the network. By design. That includes rolling back to a previous version (such as in the fork of March), preventing a theoretical exploit, or even executing a theoretical ban. But it's unlikely that a coalition would be willing to use that power for extortion. The miners have too much at stake in the health of the network.

Update:
I discovered something to add while researching something else. Satoshi made the commment that if transactions are deliberately being dropped that it could be addressed client side by coding the standard client to ignore blocks that they know are ignoring transactions. It was in a slightly different context in that thread, but the gist remains the same. If a majority of the miners colluded to exclude an address, there are some client side ways of giving favor to the "honest" miners, assuming that a majority of the client nodes were willing to upgrade to a version that protected again this.