It's tempting to giggle and snigger about all the embarrassment he is causing people we dislike, but on more sober reflection, it's obvious that this must be stomped down hard.
Governments cannot function without certain levels of information security. Negotiations would become impossible, wars will result and with them, thousands if not hundreds of thousands of deaths -- not to mention economic chaos.
What's Assange going to say then?
"Oppsie! I didn't mean for that to happen."?
Fat lot of good that's going to do.
I will counter example your statement. World War II started in earnest after the British government negotiated with Hitler. Do you remember the statement "I believe it is peace for our time..." by Neville Chamberlain, prime minister of Britain on September 30, 1938? This was regarding the Munich Agreement and the Anglo-German Declaration. How many died because of that negotiation? I have heard upwards of 30 million.
So IMHO negotiation is diddly squat, especially in today's world.
Non-tyrannical government cannot function without the trust/good-faith of its citizens; the US is rapidly running out of that currency and the 'default' there will mean the end of governance as we know it in the United States.
If instead of "trying to save face" the government would own up to what it's doing/said that would go a long way toward halting the bleeding-out of the people's trust; however, the government has taken to justifying all of its actions with "because I can". That attitude is exactly why Nancy Pelosi laughed when questioned on the Constitutionality of Obamacare. That attitude is exactly why the Supreme Court legalized larceny (Kelo v. New England). That attitude is exactly why the Executive branch violated the legal rights of GM bondholders. That attitude is exactly why LTC Col Lankin will be sacrificed in an unjust trial.
The Government has been sowing lawlessness for decades; now the harvest is coming in.