And when spying becomes counterproductive, should we still increase the level of spying? When US-led coups destabilize a region, does this maximize national security? When US-based surveillance causes a drop in investment, does this maximize national prosperity?
It hasn't yet become counterproductive. And there is not a point at which becoming more aware of what everyone else is doing becomes counterproductive.
Spying allows increased national security at minimal cost compared to higher military preparedness. Thus, it allows the same level of security at lower levels of funding.
In addition, spying can give a leg up to domestic commercial interests over foreign commercial interests.