Something tells me this is as much (if not more) an attempt to put European users' data within reach of European spy agencies as it is about protecting European users' privacy. I suppose the upside is that it ensures that peoples' data is in the hands of their own governments rather than being in the hands of governments they have no control over.
[1] http://www.spiegel.de/international/world/edward-snowden-acc...
[2]http://www.spiegel.de/international/germany/german-intellige...