So they cannot adequately track 5000 people? Or 500 even? Tracking the whole population is nutty in that equation. The core of the problem is not the amount of data, but the quality. Working out a terrorists plan is genuinely hard, the Paris attacks confirm that. The right answer would be to put the resources into the known threats.
Well, a series of lawyers ruined their businesses doing this till ACS took it on having no other business or credibility. ACS crashed and burned in every way possible - Why does Gaurdaley think it'll work?
Funnily enough, the US may have made extradition significantly less likely with this move. Dotcom can currently not pay his US lawyers and will therefore, if extradited, be forced to fight without access to the sort of resources needed to fight a case of this magnitude. This is the US intent. It is a possibly sufficient to show a fair trial is not possible in the US which is grounds to deny the extradition.