So why didn't you use Azure resources in Europe instead of "some crappy provider"? Sounds like you made a rod for your own back. If our clients are happy with Azure (in the right region) then I can't imagine many in the EU (other than perhaps national security services and their suppliers) reasonably refusing to allow use of it.

We host in Azure for some pretty significant financial organisations, mostly UK based but spreading our area. Some companies are requiring us to fully host in Azure DCs in their region, and some of those are Eastern, not UK/EU, based companies. At least one US interest that a friend's employer supplies demands data about its employees be hosted over there rather than over here, presumably so they can be assured it is kept to standards they are locally required to follow. Is it wrong that way around in your book too?

It isn't as easy as having everything in one region of course, but not much harder nor massively more expensive (caveat: most likely, as far as I know, I have the luxury of ignoring the bits that don't interest me and money is often one of those things, but I'm also senior enough that if there was something expensive happening, or something not happening due to expense, I'd catch wind as it would affect things I need to plan around) and it can't be as faffy/costly as using different providers in each territory.

If you are correctly following relevant regulations everywhere this does not fragment things any more than other rules that already existed. Aside from the fact things are being enforced this time, forcing companies handling PII to not quietly do things wrong because it is inconvenient to do things right. As an individual I'm perfectly fine with this.