is it really just that? I don't think so. Safe harbor has always been a joke to begin with. A promise of good conducts with no checks whatsoever, that's not how humans work.

Forcing the data to be in the EU makes it much harder for the US govt to look at the data in bulk and non-obvious ways, as they now have to either backdoor remote systems or transmit data back, instead of just having their little machine in the datacenter.

Of course, EU will have their own little machine in the EU datacenter, but at least the intelligence gathering is then split (which helps protect EU companies from US companies - in case you did not notice and you're born yesterday, companies govern the world, not the government per se.)

Now to implement user-side and end to end crypto in everything regardless..