Realistically, doing so would create a catch-22 lose-lose situation for American corporations.
Don't give information to US authorities from foreign servers: they're violation of US law and you get penalised
DO give away information to US authorities from foreign servers: (often) they're in violation of the privacy/access/etc laws in said foreign country, and they get penalised
I'm not American, and certainly not a fan of some of the international shenanigans perpetrated by US corporations, but allowing a law like this would be a *huge* disadvantage for US companies and possibly even a death sentence for some. As it is, many companies (including many I've worked at) have rules against doing business with US entities that store data outside of the service country, due to laws protecting customer information and privacy. So entities like Amazon, Google, etc are basically on the no-go list for vendors when it comes to any RFP that involves customer info.
The government was arrogant and idiotic for even thinking to try pushing this through the courts. They might as well run a razor across their own throat.