As a hosting provider this seems to have been a horrible business decision on Amazon's part since now their customers are questioning their reliability. It actually doesn't make much sense especially considering the paranoid nature of many of their techie customers. Yes, Amazon has business before the Feds so they might have wanted to keep them happy up to a certain point, but this seems to have been a big rash decision if they were just acting on a phone call from Lieberman.

What I've been wondering, considering how quickly and strangely PayPal, Mastercard, Visa, also acted, if what really happened here was that they received some kind of National Security Letter. NSL's are subpoenas from the government that also include a gag order preventing you from talking about the letter. NSL's were supposedly ruled unconstitutional after the government had issued 192,499(!) of them, but I wouldn't be surprised if there are unknown unchallenged variations of the letter or loopholes that allow the government to still threaten businesses without them being able to talk about it or defend themselves.