Beyond the crypto architecture debate, I don't really understand how could anyone imagine a world where MS could just refuse such a request. How exactly would we draft laws to this effect, "the authorities can subpoena for any piece of evidence, except when complying to such a request might break the contractual obligations of a third party towards the suspect"? Do we really, really, fully understand the implications…
They could just ask before uploading your encryption key to the cloud. Instead they force people to use a Microsoft Account to set up their windows and store the key without explicit consent
It's a nightmare actually.