He isn't saying Israel is less moral at all. The book mentioned above specifically points out there are a good handful of companies that sell hardware/tech to the US government that have originated in Israel.

I think the point being that Israel happens to excel at this type of thing due to the simple fact that they have been surrounded by countries who have wanted to wipe them off the map for a long time. This has happened to breed the talent that is very useful to the NSA / surveillance industry.