The NSA isn't supposed to spy on Americans, but if the logs are in Ireland, and are in Ireland _because_ they relate to non-US users, then the NSA is definitely allowed to get them. They can also collect data in transit more freely if both ends are outside the US, or if one end is in Ireland. This looks like a move to give NSA more freedom to spy on European Twitter users by segregating the Americans. Also, if politics in the US goes well, NSA will have less freedom to spy on Americans. This move is bet-hedging: if US politics turn anti-authoritarian, NSA won't lose as much access to Europeans because they'll be better segregated.
To judge this move correctly, you need to list all the forms of government surveillance: what organization is requesting data, why does that organization request it, is it possible to refuse the request. This is all secret, though. It's not even possible to disclose the request. The transparency reports Twitter and Google release aren't detailed enough because the government won't allow them to be, and has structured what they're allowed to release to limit debate on the methods and intentions of the government. The more interesting information requests, like the one Calyx received, have more of the now-standard threat-backed secrecy requirements around them than less interesting requests, so the outliers that should be driving debate are carefully hidden. There's no way for the public to judge the usefulness of what Twitter did. Twitter themselves has a better idea, but still not a very good idea.
I think the Europeans are less rational about this than the Americans.
- they think there's no first-world population-control surveillance in Europe just because their spy agencies haven't had a leaker yet. NSA leaks should tell them how stupid an assumption this is, and they should be embarrassed it took the idealism of an American to expose their own authoritarianism indirectly. Instead, they are like, "oh Americans are so authoritarian. Thank God I'm European." pretty smug, guys.
- they don't make a connection between surveillance and power. For example, NSA spies on Europeans, finds the leaders of a globalization protest movement, shares the information with GCHQ, and the leaders are detained at immigration in London until the protest is over. This is a low-hanging-fruit anti-democratic way that surveillance has been used in the past, and is a task at which bulk surveillance is good because it can reveal the structure of networks (ex. the Paul Revere metadata attack http://kieranhealy.org/blog/archives/2013/06/09/using-metadata-to-find-paul-revere/ ). But it's the connection between the surveillance and the detention that matters. Instead they're worried abstractly whether they're "watched" or not. Why would an American be worried if the Stasi had a file on them? It's a problem, though, if Stasi shares their files with FBI, which in this case, they do.
- their fears aren't proportionate. For example, some European sysadmins I spoke to fear the FISA court will approve a warrant to collect industrial espionage data through PRISM. Is this possible? Yes: the court is a rubber stamp, and if it weren't a rubber stamp it's also within spy agency skill to ask questions and disguise their goal, ex. "we think this top engineer at Xerox is into child porn so please give us complete copy of his work email." Is the fear proportionate, though? No: US is generally less corrupt than Europe when doing international business, the French in particular are notorious for industrial espionage, and there is a poor match between PRISM and industrial espionage so that US would probably use a different program and method, like exploiting employees' phones and laptops, or bribing emloyees in traditional GRU-style. For the former attack, the European response (self-host everything rather than using Google/MS/etc.) makes them more vulnerable to industrial espionage, not less. However constructing this fear provides a pretense for retaliatory protectionism, and they want to Do Something because they are Outraged. But, European-style outrage means beat up on the US rather than engage in their own broken democracies.
Europe needs to step up the game. Even this news about Twitter is something an American company has done. What has Europe done? Nothing but drink wine and eat cheese and take two months off every summer while their politics turn authoritarian and their spy agencies run unchecked. Try not to pass any more mandatory Internet censorship laws on your way to your summer houses, Europeans.