If the US government and courts take the position that any data held on servers of companies headquartered in the USA belongs to the USA, while data held on servers of non-US companies does not belong to the USA, then all these major corporations will simply relocate. It could be a major competitive advantage to be able to tell your customers that your data is safe from the US government (whether fully true or not). Many major companies have already moved their headquarters elsewhere for tax purposes, the same could easily be done for data privacy purposes.
As always, I'm sure the US will cut off its nose to spite its face, as it has so often done, with its immigration system, with ITAR, and with countless other regulation regimes.
There are other way around.
Big companies can just outsource their data center to an off-shore entity or just create another subsidiary off-shore company.
The governments argument is that since the parent company controls the overseas server the parent company is obligated to comply with a domestic search warrant. This is a very bad thing for the world citizens are the US is becoming less transparent as to how they handle things (especially under the Obama administration).
