How does this do anything about pervasive NSA spying?
Google clearly suspects the NSA is installing devices on the leased lines they use for inter-datacenter communications.
Properly implemented, this will stop that.
The NSA has broken SSL and VPNs by corrupting the CAs and the VPN vendors.
I suspect Google won't use a commercial VPN implementation. Corrupted CAs can be bypassed by using self-signed certificates, which will be fine for communication within the same company.