I'm guessing you're not familiar with Ledger Recover, so here are some links you might want to check out.
I am familiar with their plans about launching Ledger Recover, however, you didn't specify in your previous reply that your post is about what could happen once that service goes live.
"You now have an API in your firmware to extract seeds"
It's hard to comment on something we still aren't 100% sure how it will work following the PR nightmare Ledger themselves created. Before I say anything else, let me state that the feature is an absolute no-go, and I have said that in the thread where we discussed Ledger Recover. Now, from what I understood reading about Ledger Recover in the past, the seed is divided into 3 shards and no party has ownership of any two shards. But one of the companies receiving one of the shards is directly linked to Ledger in some capacity.
"Great, so now the Department Of Justice calls you and says "We are charging so and so with X, Y and Z. Get two of your vendors to send us the Bitcoin keys."
That's a valid concern. These companies are required to cooperate with law enforcement and they will surely assist if a criminal's funds need to be seized. Another example that Ledger doesn't have their users best interest at heart.
Here's the part about a hacker being able to connect the coins to a user's personal information (their KYC data):
Rodolfo Novak: "Isn't it an issue now that you have the KYC plus the Bitcoin, together? Right, because just losing the KYC... it's a problem, it sucks, right? But you don't lose the Bitcoin. Now, you have the KYC plus the coins."
I don't know who is 'you' in this context. You as in Ledger or you as in all the parties holding a shard. Neither of the two is an acceptable option for me. But like I said, we must wait until we know all the bits of the service that should have never happened.