5%
I think you've made a mistake interpreting the comment about 5%. He wasn't saying that 5% of internet communication is terrorists. That would be a hell of a lot of bandwidth for guys on 486s running Windows 95 in Pakistani internet cafes.
I think his 95% comment was a reference to the fact that the law allows only non-domestic (non-US) communications to be snooped. If I understood his point correctly, he's saying that just because that 95% of communications isn't US citizens (rather "non-domestic") that doesn't make the snooping acceptable.