If this were not the case then the Tobacco and Asbestos companies could have just said "all those meeting minutes and research records are stored in our warehouse in mexico so ha ha, you all lose." Any company or person, on any issue, could just mail the evidence out of state or out of country and get off scott free.
Interesting point. There is one subtle difference to consider.
The "moving physical documents off-shore" approach would be conceivable if not for the fact that such documents, etc. were generated by a US-based Corp., by people acting as representatives of the Corp., thus subject to US laws. IANAL, but I think this kind of maneuver would be obstruction of justice, contempt, or something similar to "destruction of evidence."
In the online case here, the issue is email caching. It does really make sense to cache users' "cloud" data in close physical proximity to said users. That said, one can easily imagine MS using this excuse as a shield to deliberately hide documents they'd like kept secret. Probably not the case here, but extend this ruling to company-internal documents, and you'll spot the trick that US DOJ is trying to prevent.
Kind of like how many Corps. have a "delete any email over two weeks old to 'save storage space'." If you delete a category of data, on a regular schedule, and before any subpoena, then the trick will work. But good luck preserving any sort of corporate memory...