"My e-mail contains the story of my life, and what's not in there is often recorded in my searches."
If GMail is a success, millions of people will move a great deal of the record of their lives online and stored with a 3rd party, laying the foundation for a surveillance society. They may not wish to do so, and Google may not wish to do so, but it's down to changing a law or a policy, which isn't all that improbably in today's political climate. And if you think that's bad, consider how multinationals might store your mail in a country with even worse legal protections.
It's not like people couldn't already read your mail, of course. It's just that GMail would to some seem as your one-stop privacy invasion centre for reading
everyone's mail, search-data, social network info, all in one place. Online, mass surveillence scales well.
Because "GMail gets your consent to be more than an e-mail delivery service -- offering searching, storage and shopping -- your mail there may not get the legal protection the Electronic Communications Privacy Act (ECPA) gives you on E-mail. The storage of e-mail on 3rd party servers for more than 180 days almost certainly causes the loss of those privileges."
"Without the ECPA protection, your e-mail (now just a database) can be seized against Google's will with an ordinary subpoena (vastly less involved than a wiretap warrant) or in the discovery phase of a lawsuit. With warrants, and in some rare cases even without them, your mail can be grabbed without you being informed that this has been done. Worse, Google has retained the right to hand it over in the case of a "request" from law enforcement, rather than a court order. ... After 180 days your e-mail archives can .. be fetched without a warrant, through a special ECPA court order or a subpoena. (In most cases, but not all, you will get notice of such seizures.)"
Unfortunately, you're not only affected when you use GMail; you're also affected if you send e-mail to people who use it. In some ways, you might even be affected if you don't:
"The more e-mail that is sent unencrypted, the more it is stored in private but external databases, the greater the arguments will be that you no longer really can expect that your mail is secure and private from being seen by parties other than yourself and the recipients. If the courts ever become convinced this is true, e-mail could lose the protections it currently has, designed to parallel the protections of paper mail and phone calls."
The Answer is Obvious:
Encrypt everything!