With secret courts, secret warrants and secret gag orders this does nothing to address the issues. Who's to say that MS won't receive a secret order to turn over access even to servers on foreign soil? I think this is the right response by MS but only as a signal to the govt that they are damaging US economic interests with their dragnet surveillance policy. Claiming US citizens don't have to worry because they are only spying on "foreigners" is only making matters worse.
Ultimately, this mess will require a political, not a technical solution. Legally some level of constitutional protects will have to be accorded to the clients or customers of US Citizens regardless of where in the world they reside. It has to be made clear that using a US company does not equal turning your data over to the NSA.
