You don’t even have to go back to Hitler and Stalin. Vladimir Putin (Person of the Year in 2007) was an at least as ambiguous Person of the Year as Assange would be.
(I’m not sure about your conspiracy theory, though.)
That really wasn’t an attempt to kill discussion. Conspiracy theories are fine, I’m only not willing to accept them just because I feel like it and without further evidence.
Saying “[…] it’s obvious Time magazine has been pressured to choose someone less controversial” (emphasis mine) seems a little too sure to me. I would rephrase that to “Time’s editors might have felt that picking Assange in the current political climate could have resulted in negative consequences, which, if it happened like that, really says a lot about media and politics in the US.”
This is not conspiracy theory. Time magazine admitted in 2002 that they are not going to award person of the year title to anyone controversial to United States anymore.
In 1979 after they have chosen Iranian Ayatollah Khomeini, they had dramatical drop in subscriptions. That was the reason why person of the year for 2001 wasn't Osama Bin Laden although he was obviously the one with the biggest impact on news in the world that year.
(I’m not sure about your conspiracy theory, though.)