"It seems like the NSA is trying to avoid perceptions that they're scanning domestic internet traffic, but that leaves us in the vulnerable position of hacking everyone while leaving our own doors wide open"

I'm curious as to what your response would be to solve this. If it's to scan domestically, then that's a 180 from every other argument point people make against the NSA and domestic operations. That said, they do spend a regular amount of time working with private companies to remedy and solve breaches by nation- state & similar actors. For an example lookup the aurora investigation.