Let's get the disclaimers out of the way. No cats were harmed in the making of Bonsai Kitty Plush. Bonsai kittens were never real in the first place. ThinkGeek's plush toy version is not a real cat.
According to Snopes, the original bonsai kitten site was a tasteless joke that was taken down years ago. You can still view it through the Internet Archive's Wayback Machine if you want to relive the outrage.
The site claimed to sell kittens that had been grown inside glass jars. You can understand why people freaked out, but it was all just a juvenile hoax.
Bonsai kittens still live on in our collective Internet memory, though. That's why ThinkGeek has unveiled the $19.99 plush toy, a fake orange fluffball squeezed into a plastic jar.
Bonsai Kitty Plush is likely destined to be a geek stocking stuffer. It would fit right in with the Magic Geek Ball. You probably won't want to give it to your PETA-supporting friends unless they have a sick sense of humor.
ThinkGeek recommends leaving Bonsai Kitty in the jar, but you can free it if you want. It's just going to be a little malformed from its time in lockup.