Least privilege vs Windows server security

["Dan Lynch" <DLynch () placer ca gov>]

Greetings list,

I'm looking for opinions on an issue of contention in our organization.
Our enterprise is made up of two networks - one for general government
departments, and another for law enforcement related departments. 

The users, Windows file servers, and MS Exchange servers of both
networks are members of the same MS Active Directory domain. A file
server, an Exchange server, and a domain controller sit on each network.
The LE network requires stronger data security measures as it also
includes non-member servers that hold highly sensitive data. These are
the crown jewels, and the LE network is therefore behind a firewall from
our general government network

The entire system is in production and running with a few administrative
and functional limitations. We've tried to follow the principle of least
privilege when allowing server-to-server communication across the
firewall. We've attempted to enumerate all services necessary for Active
Directory replication, and at the firewall accommodate only those
protocols from the general government servers to the LE servers. This
has proven difficult, especially when addressing RPC-style services.
Certain administrative scripts that make WMI calls, resulting in RPC
communications won't run.

Also, connections to the LE servers for drive mappings, RDP, and other
administrative protocols are restricted to specific general government
network addresses. 

All this amounts to some hardship for Windows server administrators.
Their position is that all communications between servers should be
allowed. They argue that if the general government domain controller is
"owned", no firewall restrictions will prevent an attacker from having
his way with the LE server. In their view, the principle of least
privilege is nonsense. Instead, a restriction is only justified if a
specific benefit can be enumerated.

I'm not quite sure how to answer them, and would appreciate any input on
this subject.

In practice, what specific scenarios justify the restrictions we've
placed on communications between these servers?

Philosophically, what logical arguments support the principle of least
privilege in the environment I've described?

Thanks for your input,

Dan Lynch, CISSP
Information Technology Analyst
County of Placer
Auburn, CA