Microsoft helped the NSA to circumvent its encryption to address concerns that the agency would be unable to intercept web chats on the new Outlook.com portal;
The agency already had pre-encryption stage access to email on Outlook.com, including Hotmail;
There has long been an expectation of formalized privacy in emails, which was asserted in numerous laws -- basically extending the concept of regular mail to the electronic counterpart.
It's like saying "most regular envelopes go through the Post Office using plain vans, if you want secure communication you send it in an armoured van staffed by personally-vetted Congolese mercenaries". Nobody touches Post Office vans not because they're hard to assault (they're not), but because they're shielded with thick walls of law.
I know that smtp is more like sending postcards and yadda yadda yadda, but that's not what most legal systems have assumed for 20 years, nor what the public at large expects.
The expectation and reality should both be "they can view the mail at certain stages but if they get caught they're getting the book thrown at them, and the incentives are aligned that breaches will be reported".
Microsoft helped the NSA to circumvent its encryption to address concerns that the agency would be unable to intercept web chats on the new Outlook.com portal;
The agency already had pre-encryption stage access to email on Outlook.com, including Hotmail;
http://www.theguardian.com/world/2013/jul/11/microsoft-nsa-c...