The data sought by the Feds is about US citizens but held in Ireland by a US company. Which laws prevail for invading the privacy? That is the key question brought in this suit by Microsoft, which was served with a search warrant which was crafted to look like it had properties of a subpoena (so the data location would be less relevant to the governance.) Quoting the linked article
One of the key unresolved issues that the case raises is the lack of clarity on what constitutes a search and a seizure and where they take place in the digital world — where data can be sent by a user in Paris, stored in Dublin and then retrieved by a company in Redmond, Wash.
Microsoft is pushing back, not the least of which out of fear that once people see the feds have access to all content in a US firm, no matter where it operates in the world, then people will move their mail and other business to non-US companies.