Of course, failing to disclose the switch to the authorities and thus allowing it to trigger could be considered a violation of a court order and lead to punishment.
X'D
Black market operators are unlikely to be willing to take this risk for the sake of their customers, but political activists/dissidents might for the sake of their audience.
A dead man's switch can't wipe the server and all backups, imaging the machine is the first thing one does (before e.g. attempting to log in); the only thing that may vary if you dump the machine with or without turning it off, e.g. getting a memory image by direct hardware access of a live system or imaging disks (and possibly RAM as well, the chips can be read if they're cooled and re-inserted quickly) after cutting the power.
In another hypothetical, I wonder if one can give one's lawyer the (password-protected) decryption key, and he can only release it when one signs a letter saying "I hereby request the keys under my own will with no duress.". If the cops are making him hand over the keys, the lawyer knows that's bullshit and can't legally be allowed to handover said key...
Add in some server wipe jobs, and maybe add some kind of man in the middle payload modifications as well, and you could keep some computer forensics techs scrambling to try to find it all. It'd be a pain to maintain it all, and it'd probably be the operator in the end who compromised everything, but it could be done.
The police have these people in physical custody. Why would they take a fall for their (also criminal) customers? There is nothing to gain but much to loose.
PS: If there is not enough evidence for prosecution, having a dead man's switch would be incredibly stupid. It announces to everyone "You got the right guys. Keep digging for evidence"
Actually, having the DB and all important files encrypted would be a better negotiating position for the admin. If the police catch the Admin and also get the DB and important files unencrypted, what is the admins negotiating position? They have the Admin and the important files.
In a perfect world, for the police, they want both, but a second best choice would be having the DB and important files with some jail time for the Admin. If I was the Admin I would give the police a choice, you can get me or can get me with reduced jail time and the DB and important file. You can get the conviction for the Admin and the buyers of the drugs too or Life for the Admin and let thousands of buyers and seller go free. Encrypted files would put the Admin in a great position.
Make the killswitch physical, an attempt to open a server physically destroys it.
This appears to work for carding rings that operate in the clear