Sylvia:
I understand that, in some cases in B.C., use of US-based services has been deemed acceptable as long as students are made aware of the location of the service and have the option not to use it. Being sure students have read the terms and conditions is the basis for informed choice and helps students develop goods skills to deal with the online world in other aspects of their life.
My sense is that much of the concern over this issue has come from institutions concerned about possible liability (not quite sure for what). In other cases, the information or discussions may be on topics which are particularly sensitive (politically or personally) in which case privacy issues are more significant - beyond just the Patriot Act issues.