It's an awful law, is far too broad, and should be repealed, but even accepting that law the regulator and many MPs have serious concerns that this was illegal.
What has David Miranda done which violates that law? Miranda was not charged with anything, he did not violate a law. He was brought in for questioning and seized of his property. This is allowed since the law is aweful and can be interpreted this way. If it was unlawful the prosecution could prosecute the police that did this. They likely won't since the law is fuzzy.
Again, I'm not supporting any of this. I'm just trying to shed some light into this since most comments her on HN are simply complaining about UK/US without digging deeper and asking themselves why this is possible and why nobody has been charged with anything yet.
Law are not black and white
On what basis? The Home Office guidelines clearly state that questioning and seizure are to be used only in cases where terrorism is suspected. David Miranda is clearly not a terrorist, nor is he associated with terrorists. To quote the guidelines:
Schedule 7 powers are to be used solely for the purpose of ascertaining if the person examined is or has been concerned in the commission, preparation or instigation of acts of terrorism. The powers must not be used to stop and question persons for any other purpose. An examination must cease and the examinee must be informed that it has ended once it has been ascertained that the person examined does not appear to be or to have been concerned in the commission, preparation or instigation of acts of terrorism.
Does the law say somewhere that they can question anyone for any purpose? If not then this was clearly illegal.
As has been noted by others, Miranda had potentially national security related material which can be interpreted as (a) or (b) of above.
This will be my last response.