With admirable clarity and brevity, Princeton's Ed Felten explains why Lavabit's owner was right to design his email service to be resistant to court orders. The whole piece is good and important, but here's the takeaway: "At Lavabit, an employee, on receiving a court order, copies user data and gives it to an outside party—in this case, the government. Meanwhile, over at Guavabit, an employee, on receiving a bribe or extortion threat from a drug cartel, copies user data and gives it to an outside party—in this case, the drug cartel. From a purely technological standpoint, these two scenarios are exactly the same."
As Felten goes on to point out, insider attacks are brutal -- just look at what happened to the NSA when insider Edward Snowden decided to go after it.
Insider attacks are a big problem. You might have read about a recent insider attack against the NSA by Edward Snowden. Similar but less spectacular attacks happen all the time, and Lavabit, or any well-run service that holds user data, has good reason to try to control them.
From a user’s standpoint, a service’s resistance to insider attacks does more than just protect against rogue employees. It also helps to ensure that a company will not be tempted to repurpose or sell user data for commercial gain without getting users’ permission.
In the end, what led to Lavabit’s shutdown was not that the company’s technology was too resistant to insider attacks, but that it wasn’t resistant. The government got an order that would have required Lavabit to execute the ultimate insider attack, essentially giving the government a master key to unlock the data of any Lavabit user at any time. Rather than do this, Lavabit chose to shut down.
Had Lavabit had in place measures to prevent disclosure of its master key, it would have been unable to comply with the ultimate court order—and it would have also been safe against a rogue employee turning over its master key to bad actors.