According to wikipedia:
Espionage or spying involves a government or individual obtaining information... Espionage is inherently clandestine
Yes, Google hands over data to the NSA. Would you rather that they didn't, got sued, and then were forced to fork over even MORE data, possibly along with money? At least this way, as long as Google has some oversight, we can be sure that the NSA doesn't have complete and total access to EVERYTHING. Every single claim is still reviewed by lawyers before anyone gets any information on anybody/thing.
Moreover, Google collects a lot of data, yes, but ANONYMIZED data. Heck, you can always see what they have collected on you, if I remember correctly, if you have a Google account. Anything actually tied to you, furthermore, gets deleted after a set amount of time; I forget exactly what that time is. I think it's searches are kept with IP/account identification for six months, then anonymized at the end of the 6 months, and I don't know how many years it is before it's fully wiped. But this data does not stick around until the heat death of the universe with all personal details attached, despite what many believe. And sure, you can claim that that's what they SAY and that they might keep it longer, but by the same argument they don't do any of this and store no information at all. Either trust the information you're given or say nothing at all. We have no reason yet to believe they've been lying, so there's no reason to do so.
As for the NSA... there's not much we can do right now. The average citizen can do exactly nothing about that right now because the average politician isn't WILLING to do anything. No matter who we elect, nothing is going to change. Sure we can recall a few people, make some noise, but we saw how long that lasted with SOPA - that is, not at all. We need support of major companies and access to lobbyists to actually change anything going on here. Until then everything is just wishful thinking. Though if anyone has any feasible solutions, I'm completely open to hearing them. And I'm pretty sure the NSA collects a LOT of data. That or Google is bugging your telephones too, and the NSA is just requisitioning those bugs. Whichever you think is more likely.