Were the steps the government took to shape and control public opinion during WWI appropriate?
In my opinion, not all of the steps that the government took were appropriate.
To some extent, the steps were fine. Although it seems a bit crude, the sort of propaganda that the CPI put out against Germany, for example, was well within the bounds of what was appropriate. There's nothing really wrong with trying to whip up hatred for your opponent in a war so that you can get more participation and increase commitment to the war.
However, the suppression of free speech was, in my opinion, excessive. The laws (Espionage Act, Sedition Act) under which Eugene Debs was prosecuted, for example, were clearly unconstitutional in my mind. There is really no need in the US to muzzle people who want to oppose a war -- speech of that sort needs to be opposed by speech, not by laws banning the speech.