State secrets vs. you

With the 9th U.S. Circuit Court of Appeals handing out free passes to hide torture under the "state secrets" doctrine, I have to ask statists, what's with the "state secrets" doctrine? I mean, what's the rationale? Where does it arise when we're constructing a just theory of the state (not necessarily the current state that actually obtains, and notwithstanding the fact that I don't believe such construction is possible)?

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Joe v. the Inspector

Imagine a Switzerland-ish society in which anyone is free to join or leave, but all members pledge to defend the whole and to maintain firearms and ammunition for that purpose. Furthermore, to ensure mutual compliance, the members unanimously agree that each member must show a designated individual -- the inspector -- his arms and amunition, and the manner in which they are stored to facilitate ready use. However, this information is deemed confidential; an enemy might exploit this knoweldge during an attack.

Joe and the inspector crash their cars into each others, and Joe sues claiming that the inspector failed to maintain his breaks in working order. The inspector denies that he had neglected to maintain his car, attesting from memory every time he changed his oil and brake fluid. In order to test the inspector’s memory, Joe demands that the inspector recite from memory the locations of everybody’s weapons and ammo. Or the report containing the records was in the back seat, and is wet. Joe suspects that the report is covered with beer, reflecting the fact that the inspector was drinking while driving. Joe demands that the report be put into evidence. Or whatever.

The question then arises, does the collective interest in keeping something secret ever exceed the private interest in disclosing something? And if so, how should that interest be protected? That’s the basis for the doctrine in a nutshell, as far as I understand it.