Assume that this report is true (I note that this is not the first time that we have heard this sort of thing) and take the NSA/GCHQ aims at face value and desirable: ie that they are acting to prevent harm to people in their respective countries.
What they appear to be doing is to damage some innocent people to prevent harm to some other people. I can understand that this might be a trade off that is worth paying - paid by the innocent people. I am far from convinced that this trade off is right or moral; but for the sake of this argument - I will accept it.
So: we have an equation, it is worth it if: Number-of-people-protected > Number-of-people-harmed.
It is, of course, more complicated. The above assumes that the amount of harm is the same in each case, this will not be true. Arguably the worst harm is someone being killed. There are lesser harms to individuals: financial loss, loss of reputation, damage to personal relationships (estrangement from families, divorce, ...), loss of liberty - these all seem to be results of the sort of tactics that the article talks about.
The difficult part is ranking the harms, so how much financial loss is equivalent to loss of liberty or death ? Cleverer people that me might be able to come up with a rough ranking.
There is also the general harm to society that is caused by gumming up free discussion and exchange of information.
Once we have done all of the equations: are we, as a society, better or worse off ? This is the big question.
The other question is: who is better off ? I said ''society'', but is that who this is really who benefits, might it not be politicians, powerful business people, those who work at NSA/GCHQ ? If those who suffer from these actions are different from those who gain - the cost equation changes depending on which camp you find yourself.
I note that some of these same tactics are also used by some large corporates who wish to protect their profits or confine knowledge of their wrong doing.
So: can anyone come up with a cost/benefit analysis, please ?