The problem is not that alternatives are too expensive, but that there are no good alternatives. I would be glad to pay $5/month to Google to get an ad-free version.
In my personal experience, it's been excellent. I've but using it for about a year and a half now, receiving from custom domains and sending from their servers.
Their webapp is better than Google's and it's actually the main reason why I've stayed with them.
It's also cheaper than $5/mo.
They are. At least the NSA is doing it at a global scale —thanks Mr Snowden for turning this "conspiracy theory" into an established fact.
> There is nothing interesting about an average person
Until there is. At that point, all they have to do is a nice search query into their ludicrously deep archive, so they can dig up whatever wasn't exactly average about that particular person. There has to be a trigger of course, but if you set one off, you'll be put on a watch list for higher scrutiny —at best.