Re: 'This, in turn, lead to the problems that plagued Azure service users in Europe'
For certain uses, you want the datacenter near the users. There are plenty of users in south east USA, but the whole area is at risk from hurricanes. So putting a datacenter there is a perfectly reasonable decision, balancing the risks and benefits.
Of course, for an organisation with multiple datacenters, designing your worldwide directory service to depend on any single datacenter is very silly.