Your first sentence, precisely. And really, it doesn't matter whether the NSA has explicit connections into Gmail, your email is backed up periodically by Goog

Your first sentence, precisely. And really, it doesn't matter whether the NSA has explicit connections into Gmail, your email is backed up periodically by Google already, so plaintext is available to interested parties for quite a while even if you were to empty your trash. But even before that, many SMTP servers transmit emails in the clear, so it wouldn't matter if the NSA had their hooks into Google if they've got their hooks into the backbones that Google peers with. Oh, and you lose all read state, all information about when an email was sent, any labels, stars, any reference headers for threading, ... Seemingly the only threat that this addresses is "someone may hack into my email account and I don't want them to be able to read my email". There are several other methods for solving that particular issue without destroying email metadata and the usefulness of email itself.