Why use Google Chat at all when there're a lot of 3rd party community-run jabber servers available? Then you can use any client you want and get a level of protection you desire (including OTR).
Probably not gonna happened, but it would solve so many problems with public key crypto. Key distribution? No problem, tie your public key to your gmail account. Need to communicate with someone? Just send them your public key. Goole would verify that key X belongs to mail Y, another problem solved. Mix it together with some javascript library (source code available by design) and you have almost perfect and simple to use public key crypto for masses. Oh well time to wake up….
Except for the minor issue that, in the context of PRISM, the NSA mostly collects metadata - who corresponded with who, when and how much.
Public key cryptography is great for this, because it means if you match one person to a key, you've then reliably matched every message they sent and have fairly strong proof it's the same person.
Both Google and Facebook are in excellent position to actually bring public key crypto to the masses in a usable, it-just-works, kind of way. But of course both have every incentive not to do it.
I thought Google were being fingered as complicit? I wouldn't trust them, even if they totally super-secret pinky promise they're not handing everything over, honest!
1. Google is removing XMPP as protocol http://www.zdnet.com/google-moves-away-from-the-xmpp-open-me...
2. On the other hand, however, duckduck is giving us some alternatives https://duck.co/topic/duckduckgo-s-new-public-xmpp-jabber-se...