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I still seem to be getting permission errors:

system log:

8/29/16 3:50:04.006 PM com.apple.xpc.launchd[1]: (local.hosts.blockingAM[7675]) Service exited with abnormal code: 1

$ cat /tmp/local.hosts.blocking.err   
cp: /etc/hosts: Permission denied

I was still getting permission errors until I ran launchctl with sudo:

sudo launchctl load /Library/LaunchDaemons/local.hosts.blocking.plist 

Moved the plist and changed name:

Removed UserName key.

Moved the plist and changed name:

$ ls -la /Library/LaunchDaemons/

-rw-r--r--@ 1 root wheel 1474 Aug 29 13:19 local.hosts.blockingAM.plist

system log:
8/29/16 3:50:04.006 PM com.apple.xpc.launchd[1]: (local.hosts.blockingAM[7675]) Service exited with abnormal code: 1

$ cat /tmp/local.hosts.blocking.err
cp: /etc/hosts: Permission denied

$ ls -la /Library/LaunchDaemons/
-rw-r--r--@  1 root  wheel  1474 Aug 29 13:19 local.hosts.blockingAM.plist  

system log:

8/29/16 3:50:04.006 PM com.apple.xpc.launchd[1]: (local.hosts.blockingAM[7675]) Service exited with abnormal code: 1

$ cat /tmp/local.hosts.blocking.err   
cp: /etc/hosts: Permission denied