Yes, the whole 'terrorist tracking' thing is a bit ridiculous.
On the legal side, I can't find any reference after a quick search so you're probably right there as well.
Unhappy customers do cite email and other secondary services as areas that could do with improvement.
As to the amount of storage I'll assume we're talking <20TB which would fit on 40 hard drives (yes I guess ntl wont be using 500GB SATA drives) which is a tiny drop in the ocean compared to the millions coming in each month.
I was delighted with the recent increase in speeds but don't see anything wrong in wishing that ntl wouldn't delete ... yada yada yada.