Your argument (modulo the part about traces being left everywhere) applies off the Internet too, right? (Or are the 3 people purely a metaphor for machines?)
@robryk I'd say it probably does. If it does, you arrive at Schmidt's actual literal quote, which was "If you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place." But I worry that may be too strict to be a useful law. 😉
in manner of degrees, it's a lot easier to silence 2 people than control the logs of hundreds / thousands of unknown machines between origin and destination of a request (and I'm not even talking about intermediate logging, which we worry less about in the days of HTTPS... I mean "Do you really know the full audit story of your personal machine? Do you really know what data the destination server tracks? Do you really know they aren't compromised behind their security perimeter? Do you really know you aren't?).
@robryk On the Internet, it's not practical to draw a distinction if the information is completely debilitating to one's reputation. "Three people can keep a secret if two of them are dead" and all (and then we do things with hundreds if not thousands of machines, each logging what-the-hell-ever to where-the-hell-ever).