[Stranger43]

He is a German citizen right? So even if the NZ government were to retract his residency he's still not on the next plane to the US.

Very few states exempt non citizens from the protections against government overreach, as most interpretations of UN's human rights treaties kind of forbids it, so even if he is not a citizen the NZ government still have to obey it's own laws in prosecuting a case against him(the US is notorious for non-compliance with treaties they themselves promoted when a treaty goes beyond the protections offered by the rather washed out US constitution).

The problem here is again that any action taken against Kim Dotcom by the NZ government in spite of it's domestic court case falling apart will be government overreach by just about any sane standard. so there is not a lot neither the US not the NZ authorities can do if the NZ court end up deciding that the he cannot be extradited to the US or convicted under New Zeeland law.

Diplomatically the problem is also that this isn’t a one of against a shady businessman but a part of a trend that have already seen the EU court nullify a data safe haven agreement due to the US court systems rather strange belief that it's not actually bound by any international treaties.