Whilst I certainly wouldn't disagree with you over the importance of encryption...well, put it this way: when was the last time you encrypted a letter you dropped in the mailbox?
The point is that it's about as much hassle for somebody at the post office to steam-open an envelope with nobody being none the wiser for it as it is for an ISP to snoop on people's mail.
People have historically been just fine with sending the most private of letters protected by nothing more than the seal of the envelope because the United States Postal Service has a well-deserved unimpeachable reputation for being the hardest of hard-cases about protecting the sanctity of the mail.
It's not surprising that people carried that same trust over to email; it's an almost instinctual conclusion to assume the one is every bit like the other save for the mechanisms of delivery.
And, had they done it right, Google could have earned the world's trust by self-policing with the same vigilance the USPS does.
But they blew it.
Royally, and spectacularly, they blew it.
But what remains most troubling about it is that it was an official government agency that twisted their arm, even if Google shouldn't have put up with the arm-twisting.