What you're missing is that it's not a philosophical issue; like it or not, it's a legal issue.
There are lots of laws in place all over the world requiring providers to store email. And the U.S. really isn't that far behind.
Additionally, lots of businesses want copies of all email sent to or from their domain name. That's certainly legal in the U.S., and in many cases may be required by law. Certainly it makes it easier to answer subpoenas. For example, if certain emails had been available in Washington, D.C., President Bush wouldn't currently be advising a former aide to ignore a congressional subpoena, an act which will probably end up seeing her in jail for contempt.
Years ago don't keep records might have worked. Today most of us feel uncomfortable if we don't keep all we can.
We don't keep the text of any email passing through our servers but we understand that we don't live in the same legal environment as some of our clients.
By the way, I suppose you know that google (gmail) keeps copies of all emails sent through their servers; even after you've deleted them. Read their TOS and you'll see that.
Jeff