Israel is used for ethically questionable stuff many "allies" don't want to do in their own countries. The NSA cannot contact random developers to spy on users, they would be caught yesterday. But it probably isn't antisemitism to state that you can sell any form of security product to more conservative Isrealis.

But yes, saying Isreal does undermine privacy to a disproportionate amount is probably false.

Not only sigint, weapons tests in general are also conveniently outsourced.