You may be right. However, "foreign entity" does not strictly mean "non-US person" and this is highly intentional. A foreign entity does not have to be a person. It can be a bank, a corporation, a nation, an foreign based activist group.
You view it as discriminatory and it may very well be; I purport that its purpose is to encompass literally everything that is not a U.S. person, thereby allowing them nearly unlimited use of all programs that are allegedly not used against U.S. persons. The discrimination aspect is import, but I think the definition aspect that extends the reach of their scope to nigh-unlimited, is also an important way to view that particular word choice.
When you are spying on a foreign bank or corporation, aren't you spying on a bunch of foreign people?
I mean, arguably, if the NSA were spying on Google, would that make it reasonably all right? It's not like Google has feelings or a right to privacy -- it's not a person, it's a corporation.
Unless they're spying on bulldozers or kitchen ustensils, "entity" could be easily replaced with "one or more people" and the phrase would retain the same meaning. It's one of the many procedures in the family of othering: we're not shooting at people, we're shooting at the 4th platoon.
You view it as discriminatory and it may very well be; I purport that its purpose is to encompass literally everything that is not a U.S. person, thereby allowing them nearly unlimited use of all programs that are allegedly not used against U.S. persons. The discrimination aspect is import, but I think the definition aspect that extends the reach of their scope to nigh-unlimited, is also an important way to view that particular word choice.