EDIT:
That is, assuming the mail is stored on the server and it's encrypted, how do you search it efficiently?
It does not seem efficient to download every byte of mail, decrypt it, and search it on your local machine (especially a phone). Perhaps you could build an index locally, but could you keep it updated? And even that requires downloading and reading every byte at least once.
This is something I've always wondered about encrypting hosted email.
I guess it would be something like encrypting the index, then decrypt it on demand, just like you would decrypt individual messages on demand.
hashed-word => encrypted-list-of-msg-indices
something like that.
You can go under the radar when you are LavaBit small (and then, only until you have a single high-profile user). But not when you are Amazon.
Who says they're not pretending to get upset about them?
The more I have sat and thought about it, the more use cases I can come up with where there is a business case for it. One big one that comes to mind is foreign companies that don't trust the US.