Yes! To a first approximation, my government doesn't have the power to put you in jail for, say, hacking into a local server in your hometown. (Yours doesn't have that power over me, either.)
So (again to a first approximation) the files that my government collects on you are only available to be used in cases with some sort of international significance. (And the same with the files that your government collects on me.) I see a vast difference between that situation and the situation where a local cop can casually dig through these vast databases to find out if I've ever been associated with anything at all potentially illegal.
There might be some deceased cell phone owners in Yemen that might disagree.
But in general, yes, spying on foreign nations have always been illegal, and always considered to be inevitable.
On the other hand, with the information sharing across borders (NSA spies on UK citizens, MI6 spies on US citizens) -- this line has already been blurred (Or for a less "redundant" example than the UK, Swedish and Norwegian intelligence services have had a rather incestuous, illegal secret relationship for a long time).
All that aside: a state where the electorate fear the elected, rather than the other way around (or; where the elected takes steps to act on their fear of the electorate) is no longer a democracy.
I'm sorry, but in a time where the US is killing people on the other side of the world using unmanned bomber drones based on just this international spying, I have a hard time believing that any of this should be "fair game".
So (again to a first approximation) the files that my government collects on you are only available to be used in cases with some sort of international significance. (And the same with the files that your government collects on me.) I see a vast difference between that situation and the situation where a local cop can casually dig through these vast databases to find out if I've ever been associated with anything at all potentially illegal.