The entire point of this discussion is that Party B should be constructing their service in such a way that Party A never gives them their secret. Party B would then be able to keep complete and perfect records, turn over all of those records at the drop of a hat, and nevertheless be unable to reveal Party A's secret.
Think PGP + Gmail, except that unlike usual, Google provides you with download of PGP.
The court could subpena Google, and Google could give the courts my PGP encrypted communications. However they would be unable to give them my private key and declaring them to be in contempt of court for that would be a massive miscarriage of justice.
PGP is a pain in the ass to use. However we have more streamlined technologies currently available that provide the same properties in this scenario. What is upsetting to people in this discussion is that companies like Skype are not employing such systems. We know Skype is not because they are employing one such "feature" that you mention (url-checking). They are therefore employing a system that does leave them open to having private information subpenaed.
You're absolutely right in describing the theory behind PGP (or GPG for the purists :), but unfortunately there is not yet a way to build a messaging service that has both features AND privacy. The should in your statement "Party B should be constructing their service" implies and expects a capability that is not (yet) possible to build. The point of my posts were to illuminate the reasoning companies make it easy to decrypt for the US government due to their exposure from in-demand content-aware features and fear of legal action.
Like you said, PGP+Gmail sucks for all parties included on a chain. Clients stop working. Non-users can't read the emails. Gmail spam filtering, ads, search indexing, and labeling all break. The same is true for PGP+Exchange, and most corporate customers much prefer Exchange features to the privacy offered to individuals with PGP.
I'm also not aware of 'more streamlined services' that offer true privacy -- please illuminate them if they exist. Services like Voltage suffer from the same root cause of reversible encryption.
So, customers have to choose: use a service with content-aware features OR use a dumb service that (currently) does not have the features. Most people choose features, and I would venture in this case Microsoft opted for features over pure privacy.
I would be among the first to welcome a way to accomodate both pure privacy and features in a service, and I encourage all to find a way. Please build it!
Think PGP + Gmail, except that unlike usual, Google provides you with download of PGP.
The court could subpena Google, and Google could give the courts my PGP encrypted communications. However they would be unable to give them my private key and declaring them to be in contempt of court for that would be a massive miscarriage of justice.
PGP is a pain in the ass to use. However we have more streamlined technologies currently available that provide the same properties in this scenario. What is upsetting to people in this discussion is that companies like Skype are not employing such systems. We know Skype is not because they are employing one such "feature" that you mention (url-checking). They are therefore employing a system that does leave them open to having private information subpenaed.