Databases contain the most sensitive information in most application stacks. User data, financial records, communications content, and operational data all live in databases. When a government seeks data about your users or your operations, databases are the target. A database hosted in the US or UK is reachable through US or UK legal process - a National Security Letter, a GDPR Art. 48 transfer, or a standard subpoena can compel disclosure.
A database in Iceland operates under Icelandic law. An Icelandic court applying Icelandic law must authorize disclosure. Iceland's legal framework provides strong privacy protections for data stored there. A Romanian database server is subject to Romanian law. Romanian courts apply Romanian standards, not US or UK standards, to data access requests.
This jurisdictional protection is meaningful for any application that stores data about users in ways that might attract government interest - political organizations, legal services, financial platforms, communications tools, and medical applications all benefit.