One could use encryption but most receiving users have not the faintest clue on how to use that. If most people would care, then I wouldn't give a flying fuck about what Google does because they can't read my mail even if they wanted to.
You can't really use encryption for a couple of reasons:
1. Encrypted email only protects the email body. All the metadata - who is emailing who, when, from what servers - as well as the subject line, are in the clear regardless. The metadata is more valuable than the data in many cases.
2. Unless users download all their Gmail messages, leaving none on the server (essentially, like an old POP account), then the decrypted message bodies will be in their Gmail account for Google to read.
