Are we going to be throwing meatspace postal workers into jail when they read the text next to the address on a postcard? That would be insane and unrealistic expectation of privacy, wouldn't it?
The comparison is not apposite. What Google does is akin to postal workers scanning postcards and storing them in a database which is used to profile people so as to push services on them. You can be certain that if postal workers did this, then there would be an outcry.
That's not just my opinion, it's the opinion of everyone who knows anything about email.
I've been an email postmaster since the early 90s. Your opinion is not by any means representative of "the opinion of everyone who knows anything about email." The issue is not storing the emails but the damn data mining that Google performs on them. I've never data-mined the emails stored on my server, nor have the postmasters that I've had the pleasure to work with. As a matter of fact, we take measures to avoid accidentally looking at people's emails. That they are not encrypted does not make it okay to snoop. It's called having a sense of ethics.
And we (me and the postmasters I've worked with) all think what Google is doing is shit.