“Google can compete for Pentagon contracts without violating principles”

No, you cannot really do that. If you become a government contractor, you open yourself up to government demands and in this case it will be curation of content and exposing user information. We already had the pleasure that government agencies getting access to search query results.

"Does cutting out the tongue of prisoners prohibits them falling in love with others?" - popular search term for a computer game called Rimworld.

Employees should know that a publicly traded company cannot have too many values. It can have every value for external presentation and PR, but you would never know if they mean it or not. We have seen countless cases where companies supported the worst regimes to keep operating in their jurisdictions or just for profit. Values of companies are a sponge-like structure that change with the loudest outside demand.

There are 10 principles of Google now (subject to change), the first one is that the user comes first. User would be the government here, although it is of course meant to be understood differently.

Absolutely, Google can. Google demonstrated it could argue before judges their case over Oracle on Java and win the argument.