The thing is, in context of the whole quote, this is all about illegal activity very specifically. The larger point was that Google isn't allowed to be a confidential friend of yours by law, even if it wanted to be. You think Schmidt isn't aware of MLK and the "it gets better" campaign? You can take any sentence out of context and make a person seem cruel and unthinking.
Look carefully at the whole quote. He treats the collection and retention of data by Google as a fixed reality that everyone needs to work around--despite the fact that he was Google's chief executive at the time and had the power to set or alter those policies.
U.S. law does not require this collection or retention of data; federal access is a consequence of Google's policies, not a cause.
I don't think Schmidt is cruel. I do think that like many ambitious people, he has a blind spot for conceptions of the world that conflict with his goals.
