But even then this will only solve the chatting and storage problem (somewhat), but not the Gmail problem. Even with local encryption available as one-click, it seems very unlikely more than 1% of the users would use it, because they'd need to send the key to their friends, and that's just too cumbersome. And if only so few use it, then it's as good as useless, and Google still can't be fully trusted for e-mails (thanks to the US government).
What I'd like to see Google do now, is become very pro-active about this, and to implement measures like this to "give the privacy control back to the people". Then maybe, just maybe, I'll begin to trust Google again.
But I'm not holding my breath. I doubt it's illegal for them to do all of this, but especially if there's a legal grey area here to make it easy for their customers to encrypt stuff locally, I don't see them bothering to fight for this. The only way they might do it if there's a significant threat to their business, much like SOPA was.
That's why I'm hoping the theory put forward by the author will become reality, and this NSA story will hurt US companies' bottomlines badly, and their international relationships, because only then we'll have true competition in privacy.
It's also probably the only way to convince the government to stop doing it to this extent, because from what I've noticed they listen a lot more to money and lobbying than to citizen outrage.