German Gmail Might Be Kaput

Silicon Valley and the German legal system haven't been the best bedfellows as of late. We heard vague implications of this first through
Flickr co-founder Stewart Butterfield citing "local legal restrictions" as the catalyst for Flickr's German fallout, and now Google is in the hotseat.
From Google Blogoscoped:

According to information from Heise, Google warned that they might disable Gmail in Germany as last fallback should the German government maintain its position in regards to a newly passed law on record-keeping and supervision of internet traffic.
According to this law, email services here will be forced to maintain personally identifiable records attached to email accounts.

The reason for this federal encroachment? According to the German government, it's to aid the country's efforts in the war on terror. Naturally, this move goes against Google's general policy of offering anonymous accounts, so it's anyone's guess as to how they'll be able to navigate out of this stalemate. But after all the flak Google has received lately regarding its privacy practices, winning this battle might be the PR coup the company needs.