Or is it a lawful use and shows just how badly written, widespread and unjust the act is?
There have been statements by Teresa May attempting to justify the use of the powers since possession and latterly publication of confidential documents could arguably aid terrorists, but Miranda's actions are clearly not within the conditions that apply.
So it is a case of the UK overstepping the mark legally in an attempt to buddy up with the US, again (the White House has confirmed being notified of the action, and thus did not prevent it).
In reality it may be invoking the Streisand effect and fueling opposition at least as much as it is suppressing free speech - after all, it is fairly clear that Greenwald et al take precautions (as they must have to) to ensure that documents are replicated and available in multiple jurisdictions. But there is perhaps still not a good understanding of those processes and the ways that digital data can move at a UK political level.
The EFJ has released a statement regarding the affair, but I can't find an English text copy of it. Here is a dutch article referencing it, google translate probably required:
http://www.nu.nl/media/3556146/europese-journalistenbond-hek...
One choice quote from all the material about Miranda's detention is this:
"One US security official told Reuters that one of the main purposes of the British government's detention and questioning of Miranda was to send a message to recipients of Snowden's materials, including the Guardian, that the British government was serious about trying to shut down the leaks"
It looks like it has sent a message alright, every journalist in the world has been made aware of how serious this issue really is and that they and their family members (active or otherwise) are potential targets. This is the media equivalent of sticking a baseball bat into a hornets nest.
The big question for me is - why send such a strong signal to journalists? What is the big secret?
* That the fight on terrorism is ineffective because they have long been using techniques which evade all this surveillance
* That terrorism is no longer genuinely a significant threat thanks to human and signals intelligence, and thus the entire war is essentially a huge budget grab (and employment industry, and control/power mechanism)
* Simply that shutting down independent journalism is a goal
Or some combination of the above? I never imply wide conspiracies as I think they're genuinely too difficult to co-ordinate, but people/organizations do independently/implicitly collude by seeing each other's behaviours and reading the zeitgeist.
And this is a real life example that really strikes home to the heart of all journalists. Short of shutting the entire media down, this can only be a bad move.