You're right about the tin foil, but wrong about the pipes and beatings. Only a subpoena is needed.
There's really no point in pretending like the trick is keeping the NSA out when a subpoena is all they require to get in.
The knee jerk reaction would be to call such a reorganization a failure. It wouldn't necessarily be one. If a breakup worked as intended with each unit succeeding it could be a model that apple and google might be day follow.