I don't believe that's true.
1. Google (and others?) is already aggressively increasing the amount of encryption it does on traffic between its datacenters. So they have been addressing this problem before it was even brought to light.
2. We easily have the encryption abilities to do many more things than we do with secure cloud data; we'd just have to pay more for it. For instance, I can encrypt everything the minute it leaves my laptop, store it in the cloud, and not decrypt until it hits my laptop again. Nobody but me ever gets the secret key (heck, it could be a one-time-pad and thus unbreakable). If I trust the cloud computers themselves, then I can store different secret keys on each and use strong public-key encryption to protect all traffic between different machines in the cloud, and between my machine. Breaking the system requires compromising a machine, and even then you only get the key for that machine.
3. In theory, fully homomorphic encryption could allow the best of both worlds above. I completely encrypt my data on my machine --- nobody else has the key --- then send it into the cloud where cloud companies can do operations for me like searching, sorting, filtering, etc, all without ever decrypting the data or learning what it is. They send me back the results (securely), then I decrypt. Of course, right now this would be massively slow and expensive, but progress is being made.
Naturally all of the above are subject to the "5-dollar wrench" rule or the "secret court/FISA/warrants" rule. You cannot protect your data from the people making a law that says "give up your data". But it is technologically possible and even feasible to secure data from the NSA's snooping. The tradeoff is cost and time.