Earlier quoted context omitted.
That is in fact more or less what the law allows firms to do: when their database is compromised, they are allowed to cooperate with other service providers and with law enforcement to track down what actually happened to their systems without spending $50,000 to ensure that they aren't violating, say, DPPA.
So that means, if the database contained emails, call records, or sms, The feds could read all of it. That sounds like a security risk waiting to happen at your cell phone carrier and email service provider.
The bill as written, even before the narrowing amendments, acknowledges the risk this subthread discusses. It does that by trying to define "cyber threat information", as information directly implicated in an attack. In the sponsor's notes on the bill on the House site, they explain that the definition of "protected entity" was changed specifically to prevent individual people from being considered as entities, so that person-specific data couldn't be handed over under CISPA authority.
The basic problem the bill addresses is this: large companies are under continuous attack. Let's stipulate that attacks come in two flavors: DDOS and targeted malware.
In both cases, there is clear utility in allowing companies to collaborate with other companies and with the government.
In the DDOS case, you want to share NetFlow information with your upstream ISPs and with DDOS trackers, because those are the organizations that generate black-hole and IP filtering rules, and they all work better if they have lots of different vantage points to work from. At the very least, you want to push sources back up to your immediate upstream providers so they can soak them up on their infrastructure rather than saturating your uplinks.
In the malware case, you want to share forensic information that would help identify (a) the vulnerability the malware exploits, (b) the C&C system the malware is using, (c) any evidence of the source of the malware, and (d) forensic information that would help investigators discern the intent of the malware.
In both cases, your company's general counsel is apt to inform you that the legal risk of sharing just that information is potentially unbounded, because nobody can predict exactly what claims could be made under ECPA, SCA, DPPA, HIPAA, FERPA, &c; nobody even knows what traces of information, overt or statistical, might be lurking in NetFlow.
So the situation we have today is that there is information sharing when attacks happen, but much of it is sub rosa, and you have to be in the right clubs to get access to the right sharing networks.
It does not make intuitive sense to me that electronic privacy should mean that basic low-level systems information incident to a real attack should incur unbounded legal risk when shared with other companies directly involved in mitigating those attacks.
You might disagree, and that's fine. But the notion that CISPA is actually intended to allow NSA to read your email is just not supported by the language of the bill, by any advocacy for the bill, or by any of the bill's amendments, and the problem the bill is addressing is a real problem (I have some limited professional exposure to it).