The truly worrying thing about this whole mess is that the 'mericans believe that they have jurisdiction over OFFSHORE servers. Once again, the USA want to meddle in the affairs of another country - since when was Ireland a state of the USA? They seem to fondly believe that their "Laws" apply to the rest of the world!
The US Government can request the data from the Irish Government, but will probably be told where they can stick their request!
It's also rather worrying that MS can claim to have any kind of data security - everyone knows that this is complete nonsense.