In 1971 we put wire taps on Soviet underwater communication lines within territorial waters despite sound detection devices placed along the seabed. I'm sure the country that had the ingenuity and balls to pull off Operation Ivy Bells (http://en.wikipedia.org/wiki/Operation_Ivy_Bells) when it faced the existential threat of Communism is perfectly capable of figuring out how to do the exact same thing to packet communication in the continental United States as it faces the threat of Terrorism.
It is a fundamental issue of volume. Unless we assume that backbone providers and Internet companies habitually over-provision, then it would take about the same size pipe, and the same size data centers, to "copy" the Internet in real time.
Consider how big the Internet is. Even if the NSA has 5 100,000 square foot data centers, think about adding up the aggregate data center footprint of Microsoft, Facebook, Apple, Google, Yahoo, Amazon, Rackspace, etc, etc. That comes to a lot more than 500,000 square feet. And this does not even get into the enormous data resources in Asia and Europe.
A much more likely scenario is that they are heavily filtering the data in real time and keeping just what looks useful or suspicious. That is still scary, but less fantastic than the idea that every packet is getting stored by the NSA.
I've looked at my own traffic and how much content useful for storing I'd have and it's probably less than 500Mbytes per month. And that's counting downstream and upstream.
But net is not the only thing NSA is interested in storing - banking, other records, communications over satellites, etc goes in there as well.
What's truly scary is people are sort of "meh" about this. Or they don't believe that this is really happening, as most of this thread seems to be the case in point.
