'It's essentially about the distinction between "mail" and a "database record"'
Not quite. It's about the distinction between a company's records and something the company is holding on someone else's behalf.
It seems to be a very dangerous path to follow. If it's upheld in law that a record that's held on someone else's behalf is part of the companies records then it effectively destroys the business of any trustee business and a good deal of the business of any safe deposit business because both of them are holding other people's records which they should not be treating as their own.
Consider how this could go wrong. A trustee is holding records, say share certificates, on behalf of clients. The trustee company goes into administration or liquidation. What should happen is that the certificates are returned to the clients as they're the owners. If they can be treated as records of the trustee the administrator or liquidator could then take charge of them in the same way as they could take any other records and deal with them as they please and either use them as collateral to borrow against or sell them.
I see no objection in the US demanding any of Microsoft's records wherever they might be held. It's simply that email or any other data of Microsoft's customers shouldn't be included in that.
One has to wonder why the US doesn't use the MLAT. Didn't the official concerned know it existed, was too lazy to use it or just decided to throw his weight around? Or wasn't there sufficient prima facie evidence to ask for a warrant in an Irish court? Or did they have sufficient evidence but were just being too secretive to present it?