Even if the sender and receiver is Google-hosted, they could still encrypt mail, so it's encrypted at rest if it's copied from a user's gmail account to their local mail via pop/imap? And, since Google would be generating the private key, they could also decrypt it server-side in their secure environment, do whatever scanning for advertising/spam classification, and still deliver the same product?
As other users have pointed out, if you're trying to protect against an adversarial Google, you've already lost by using gmail. If you're going to trust them with message composition software, and transport, just go in whole-hog.
As far as I can tell, Google seems to have their security ducks in a row, and take this stuff seriously. Deployed correctly this could be another "raising the bar" event on email security, and help mitigate against servers still not requiring tls/ssl on port 25.
So this is just to give the illusion of privacy and security then?
If you want to protect against an adversarial nation-state, well, power to you, but it's an uphill battle. Use PGP, not S/MIME, and pray that everyone else knows how to use it perfectly, making no mistakes at any point ever.
This really is a problem that could be reduced. For instance there is no easy way to copy the S/Mime certificate from my macbook to my iPhone
CA and Web of Trust both require verifying the key fingerprints of yo want to be serious about it, but smime was much more easy to use overall.
