Possession of a file doesn’t imply that Google was reading that file, and absent a very limited set of criminal actions for which a search warrant might be issued there’s always been a reasonable expectation that Google was not reading your files… now Google is reading that file, apparently by default.
Not sure what you mean by "reading". Google has always been indexing all personal content to power the search feature (not public Google search). It's a major reason why I use their services.
Let’s take “reading” to mean “learning the semantic meaning of” then… an index is really just a data structure populated with the words and link back to the document, but no developed notion of the semantic meaning of those words or a semantic meaning like “odds this is the user’s SSN” associated with the content of the document, and it could easily be held entirely within your user account, entirely accessible only to you. This is much closer to a Google employee opening your document and reading it and emailing you back a summary as a default action, even if I’ll admit that employee is not generally intelligent. If the technical details make it so the “semantic index” is held only within your user account and only ever accessible by you and cannot under any circumstances leak outside to Google at large, then okay I might be comfortable with that, but I’d want to know those details first rather than just having this “feature” enabled on a file type.
