TL;DR
> A U.S. email provider can promise its users all the security and privacy it wants; it still has to do whatever it takes to give the government access.
> A U.S. email provider can promise its users all the security and privacy it wants; it still has to do whatever it takes to give the government access.
You are correct, in that the government does have the authority to demand information on a specific person, but due to how Lavabit was designed that information was encrypted in such a way that only Edward Snowden could provide the password for decryption.
In most systems data is stored in plain text (or encrypted with a cipher key known by the system administrator), so surrendering data in readable form is not an issue.