Can they do that?
I assume there is a difference in law between the somewhat passive act of giving access to information already stored and forcing somebody to actively perform some action.
For example if you have private CCTV on your premises, a court can demand access to whatever footage they have captured but I don't think that they can force you to install hidden cameras on your property.
Isn't stuff like that usually done as part of a bargain, like having somebody wear a wire in exchange for not going to jail.
They persuaded a lot of big companies to collaborate actively (i.e. Microsoft, Blackberry etc subverting crypto). Personally I don't see it as legal or ethical, and would resist it, but a large government can bring a lot of pressure to bear. So if tarsnap got big enough to be a problem, then perhaps we'd find out.
For example if you have private CCTV on your premises, a court can demand access to whatever footage they have captured but I don't think that they can force you to install hidden cameras on your property.
Isn't stuff like that usually done as part of a bargain, like having somebody wear a wire in exchange for not going to jail.