They spied on unencrypted data as it was transferred between data-centers. They can't decrypt or MITM anything because they don't have google's keys, and chrome using HSTS cert-pinning means that the cert is fixed and can't be faked with one for google from another top-level CA.
This isn't proof that the NSA has googles keys, but it outlines how the NSA uses stolen keys to decrypt information. I'd imagine google would be one of their main targets.
Yeah. Spies have regularly provided data, for free or minimal compensation, to nation-state actors. Sometimes, this is information they know will result in the deaths of others. Often, the very act of doing it may result in the death of the perpetrator if caught.
Appeal to patriotism, a few million bucks, and immunity from prosecution? Surely someone highly placed at AppGoogAzonSoft is susceptible to that.
As far as we know only on insecure channels. Google had "private" pipes that they thought they didn't need to encrypt between datacenters and they didn't think they needed to encrypt that data. That was the MITM we knew about. I don't believe we know of them MITM'ing a cryptographically secure channel.
Although Bruce Schneier suspects new leakers behind recent reports, for now anyway most data about NSA capabilities that we have comes from Snowden documents. From this data it indeed follows that NSA didn't break cryptography two years ago. But it would be plain unprofessional of them not to raise the game by this time, especially given world's backslash against leaks.
I'm not saying that NSA nowadays have means to break strong crypto. But they surely should have responded to the growing usage of crypto in some way. My money goes on increasingly employing insiders.
Actually, I'd say the probability of three-letter-agencies planting backdoors after Snowden leaks have increased: developer community hasn't responded with radically new tools and techniques that would allow us to detect and root them out on mass-scale, at the same time journalists burned lots of NSA's precious toys while IT-companies rendered others useless by mass-deploying crypto and modernizing their infrastructure.
Didn't foreign government agencies already do that? (e.g. NSA?)