Yes, I'm sure that's their reasoning. But we'd never accept it if, for example, they shut down an entire office building or mall because of a crime in just one tenant's space, or even a crime by the landlord... on the off chance a tiny bit of evidence might be in one of the corners of the building.
They get away with it here because the data center is out of view and the losses are abstract. But the costs they're imposing on third parties, just to save themselves a little trouble and risk of misidentifying evidence, are unreasonable.
Residences are protected against overly broad search and seizure through the procedure of getting a warrant. A warrant is for a specific address. The police can't go and cordon off the whole block just because they want to make sure they get one house.
There needs to be some sort of analogous procedure for datacenters.
They get away with it here because the data center is out of view and the losses are abstract. But the costs they're imposing on third parties, just to save themselves a little trouble and risk of misidentifying evidence, are unreasonable.