Flywheel does not MITM SSL connections; it does not proxy SSL at all. If you just mean "MITM" in a generic sense, the fact that you believe you have "data sovereignty" is interesting since we're talking about unencrypted HTTP here. Nearly all ISPs and mobile carriers undertake proxying and extensive analysis and manipulation of in-the-clear HTTP traffic. We agree that users need to opt into this feature -- since you have to trust Google to proxy your traffic, after all -- but it's important to keep in mind that many other parties on the path between you and a website already do transparently proxy your unencrypted traffic.
Regarding the Third Party Doctrine, the fewer third parties with access to the information, the more sovereign over the data the remaining parties are. But I agree with you that ISPs and mobile carriers are other companies who intercept, profile, sell and partner away plaintext information - and indeed in the case of at least some mobile carriers encrypted communications too.
I agree with the assessment that this is an opt in feature. I have spoken about the reasons I won't be opting in. (In my opinion it is a very bad trade.)
Definitely agreed that many other parties have access to the data. I disagree that this is an argument to add another.
[By the way, thank you very much for taking the time to speak on HN about Flywheel from your position. :)]
(I'm biased, but I'd personally rather have Google MITM me than a mobile carrier like Verizon or T-mobile.)
Flywheel ends up masquerading some of that traffic, so if for no other reason, it is atypical. I also perceive that it would be in Google's best interest not to abuse that privilege since advertisements are how they make their money. If they abuse that privilege, consumers will go elsewhere and they will lose their market advantage.
You only need but look at the cookie tracking the telecoms are doing right now to see that their oligopoly gives them little incentive to respect consumer's privacy.
It's true they may not have much incentive to protect your privacy (besides perhaps competition from "better" companies and/or legislation).
But also keep in mind that Google has a huge incentive to breach your privacy, and have been taken to court over it, numerous times.