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If, as I think you're saying, there was a thought that engaging with China in the free market would create more democratic-like conditions there but the US Gov'ts involvement in the open-market of email services (Micro$oft) has had the opposite effect and possibly taught them to not hand over everything to the free market for problems exactly like this, then, yeah, that's ironic.
However - and this should not be glossed over - any organization be it private, state, federal, nonprofit - whatever - who doesn't maintain their own email servers and connectivity is essentially abandoning its security posture to other companies.
That's standard practice of course, and one of Micro$oft's big selling points: "we'll handle everything, just sign here". But of course they're average at it, and they can't be everywhere at once. Most people are average-to-awful at it, because computer security is amazingly complicated once you dig into any given aspect of it. Not letting Micro$oft off the hook - they absolutely made bad trade-offs and opened the government up to Chinese hackers - just that anyone who thinks you can just contract someone else to do your information security and all is well is really not making a good decision.
We've outsourced everything and the stupid electronic agreements that say what the conditions are don't mean a damned thing. What, is Micro$oft going to pay a fine equal to ten minutes of their profits?
And here's the point - it was always the case. We argued against signing everything over to Micro$oft for decades and here we are. It's never been any different. No one should be surprised at all. We were always going to end up here, sooner or later.