... If that practice is going out the window then my business just went out the window for them as well, and I'm certain I'm not alone.
I certainly understand your sentiment. I wonder where you will go as an alternative? Even if a competing service "refuses to back down", how can you be certain that your messages are not being intercepted? In this day and age, I think we all have to assume that anything we didn't encrypt ourselves is being read by somebody.
The state's business is whatever the voters say it is. If you don't like what they're regulating, go vote for someone else.
This is known as "tyranny of the majority", and is terrifying to people who care about the rights of minorities and individuals. The "state's business" needs to be limited by a constitutional framework so that do-gooders and ignorant masses are kept from crushing any random eccentricity that rankles their sensibilities. Not that regulating TV commercial loudness is an example, but I had to respond to this odious assertion.
The universe is like a safe to which there is a combination -- but the combination is locked up in the safe. -- Peter DeVries