Bad bad precedent, what if Microsoft complied?
"Unlocking targeted accounts involves sending a rogue Java applet to targeted users that captures a user's passphrase and sends it back to Hush Communications"
Well that's a bad precedent, since Microsoft has the ability to send similar code via it's Windows Update to capture passwords or private communications. What if they received one of these demands? Would/have they sent a rogue applet to the users machine?
(Didn't we just have an undisclosed Windows Update recently?)
All you'd have to do is issue a warrant to them to spy on anyone, any government official in any office in any jurisdiction, all subject to a US warrant issued under US law directly to Microsoft in Redmond.