The news spin seems to be that the court found it completely legal for an ISP owner to read his customers' emails because they were on his system. But that's not what the court decided. The court simply held that the defendant was not criminally liable of a very specific federal criminal charge -- wiretapping -- because he didn't "intercept" anything as that term is properly construed in the wiretap statute. [...]
The law seems to be out of synch with consumers' intuition about what they should expect when they open an email account. but it isn't the wiretap law that's out of synch, it's the whole body of law that places too much importance on where data travels and is stored and not enough on what kind of data it is and who wrote it and why.