Is it entrapment? Or just giving the guy what he was going do anyway? Once upon a time, a guy would come up to people on the street and ask if they wanted to buy a watch... Yeah, it was either a cheap counterfeit, broken, or stolen. The cops started doing it and arresting buyers for "receiving stolen goods". They argued that it wasn't entrapment because not every one bought one. Only those who would have done it anyway. So.. I'm not sure.
As for PRISM, etc... I do think these sort of thing does need a test case all the way to Supreme Court.