Let's assume Microsoft in general, and GitHub in particular will get their way and severe ties with ICE. Guess what's going to happen next?
a- Suddenly ICE is going to become a nice entity and everything going to be peachy
or
b- Chinese will supply the software instead, or worse, is going to be internally made by government, meaning NSA will have another wet dream come true
If Github/Microsoft start picking and choosing which agencies to host, I would say it's somewhat likely and understandable that they be blacklisted from future government contracts and contract renewals.
It's also somewhat likely that in such a case, as we have seen with the Huawei moves recently, the US government could halt sale/export of tooling to any other government.