As I define privacy,
privacy only matters when another human sees the privacy-sensitive
information. As long as GMail only allows their computers to scan the
emails for Ad Words, there really isn't a privacy breach. To the
extent they collect aggregate statistics, that is in theory a privacy
breach but one so diffuse that it is not practically worth worrying
about.
Of course, the moment a human reads your email or personally
examines you, your privacy is infringed... but there is nothing
special to GMail about that. Unless you run your own mail server and
all your email, both sent and received, is encrypted, a wide variety
of strangers have full access to your email messages already.
While Google may theoretically be able to do some scanning with
their technology, again, there is nothing special to Google about
this. If the goverment wants your email, they can subpoena it from AOL
as easily as GMail.