That's just CYA speak. GMail is taking off well, from what I can see. The privacy issue is overblow.
If your data is stored on someone else's server, in whatever form (be it e-mail, or any other form of data storage online), it is inherantly prone to being "snooped" by the owner of that server.
(NB: At one point, I was decidedly creeped out by the GMail program, then took a closer look at it, and really thought out the issues involved, and decided anything in a GMail account was no less private than any other online e-mail service).
