It has been at the forefront of pushing SMTP to SMTP encryption and HTTPS everywhere. Google has to spread (and perhaps seriously believes in) the idea that they transfer data securely, unreadable by the Five Eyes. Because the perception that Google is in bed with the NSA et al. is seriously undermining their reputation (especially in Europe).
On the other hand, scanning content for ads requires that they have unfettered access to user data. If by implementing good end-to-end encryption e-mail would not be visible to them anymore, their abilities to do user profiling of those on and not on GMail would be impeded seriously.
If you want real privacy, you should move out of the Google ecosystem. Their terms of use are too far-reaching and their interest in your data too large to assume that they would go all-in with complete end to end encryption of everything.