Why did they take an entire rack, instead of a few servers? I can think of a couple of potential reasons. - VM's, which could potentially live on any physical server in a VM pool - Insufficient information on which physical servers belong to their suspects - They just don't trust the colo operators to not be involved, and thus limit the suspect data to the servers they provide.
While I wholly agree that it's unfortunate that Instapaper and Pinboard were affected, it's not an unexpected consequence of having your servers alongside (or on the same physical machines) of people you don't know.
If you want to say "tough luck that's just what it costs to collect evidence in 2011", fine, but it's probably not fair to say that the FBI should just naturally have that capability.
But, steel yourself: a very good forensics pro would probably have them acquiring expansive warrants for hardware seizures, because very good forensics pros are paid to foresee all the crazy things colluding providers and criminals can do to hide evidence.
It wasn't until 2007 that they updated the Handbook of Forensic Services[1] to no longer require seizing peripherals of suspected evidence. Think about that for a second, that means mice, keyboards, monitors, etc.
The team who worked on this raid ironically is part of the DOD CCC, which is a joint forensic lab setup between the DOD and the FBI (they have two labs, one in Maryland, who would have been involved in this raid, and one in California). That team certainly has some smart folks on it (they're the subject-matter-experts for forensic acquisition at the FBI), but if they've devised special procedures for dealing with datacenter or cloud forensics, they haven't been codified yet into the HFS.
One of these collaborations is responsible for you being able to type that comment and have it be readable by someone on another computer.
As to the specifics of the DOD CyberCrime center, it was set up in 98 to offer training/services to other law enforcement and counterintelligence agencies.
Basically, someone figured that instead of having to have each seperate agency stumble around in the dark dealing with cyber crime, they could pool resources and try to standardize. It's actually a pretty good example of getting rid of beaurocracy.
[1]http://www.law.cornell.edu/uscode/usc_sup_01_10_10_A_20_I_30...