If I understand correctly, Google is equating its slurpage with the actions of sysadmins who are engage in securing their own networks and thus 'listening' to traffic.
If this is the argument, Google needs to have its collective ass kicked, starting with the legal team. The sysadmin who secures his/her own network is working within an organisational boundary, where a reasonable argument can be made for judicious oversight. In applying this logic (?) to its own activities, Google appears to tacitly assume a paternal oversight of _all_ computer communications -- and that is something to be struck down with no subtlety whatsoever.
The very act of making this claim begs further punitive action.