Yes, it definitely seems like scary stuff giving data like this to Google. I realize I'm in the minority on this but here's a few things to consider. For one, the cost efficiencies of the cloud make moving there an inevitability, even for governments. So forget about Google for a moment and realize that this is happening and will be happening regardless. Then the choice of provider(s) is determined by many factors, with company size and stability being key among them.
Here's another take on things from a data security and accountability perspective. When the government has data stolen from it, which happens all the time (ask Tom Clancy), we neither hear about it or when we do they perform an internal investigation solving absolutely nothing. They can literally prevent us from doing anything about any problems arising from this responsibility they assume for all of us.
Google, on the other hand, must obey laws and in the event of a data breach would be accountable to the US government. The government will then do anything it wants to Google in the name of "National Security." Somehow I have more faith in the government keeping Google honest than the government keeping itself honest
