Frankly, in my opinion, while EU-based companies with their privacy laws may have some high ground to stand on, of the others, the common web startup with, say,

Frankly, in my opinion, while EU-based companies with their privacy laws may have some high ground to stand on, of the others, the common web startup with, say, the .ly domain name certainly invites at least as much worry as anything else hosted in the US. At least, hopefully, this debacle would cause some realistic assessment of the situation with regards to privacy, legality, and data retention instead of, for example, purposefully routing data through third-world totalitarian regimes just because their TLDs sound cool. (I know how DNS works; and it doesn't matter that your servers are elsewhere.)