From the article:
> With the SSL keys, and a wiretap, the FBI could have decrypted all web sessions between Lavabit users and the site.
It sounds like he was incurring some significant fines as well, so he was left with the choice of undermining his entire business model, or closing down.
It looks from the article, that they didn't request keys right away, but wanted some other kind of access to target Snowden. There are no details however what that was. SSL keys request already came when Lavabit refused the first one.
I was talking about that unclear first request above.
It sounds like he was incurring some significant fines as well, so he was left with the choice of undermining his entire business model, or closing down.