As a German, I must disagree. It might seem that the situation with the German intelligence services is as bad as, for instance in France, but on closer observation, this is not true. There are multiple reasons:
1. Our intelligence agencies are not quite as accepted as those in France/UK/US. The general public has an unfavorable view, mostly due to history, but also due to more recent scandals. Mainstream newspapers are not afraid to create bad publicity for those services, unlike in most other countries.
2. There is currently a parliamentary investigation into the NSA scandal. Our government, which is complicit _and_ ideologically accepting of NSA spying is doing its best to drag its feet, but it still moves ahead. So far, it already has started raking up dirt on our own intelligence agencies.
3. Thirty years ago, Germany had two foreign intelligence services. One world-class service that had few rivals, ruthless and efficient, and one mediocre service, staffed by former Nazis. The mediocre service was the one of West Germany and is thus the one still in operation today. There are people in Germany today (some even in the parliament) that advocate the abolishment of our intelligence services on the grounds that they are an ineffective waste of money. I doubt that they will be completely abolished, even if the scandals here in Germany pile up higher, but it is not unlikely that they may have to face radical reform quite soon.
You are right that many people over here, especially within the startup scene, delude themselves about what our own services are doing. However, the average German techie has a relatively high chance of being educated on the true extent of the spying, because the CCC is reaching out in all directions to educate people, and is rather successful at that.
Because let's be honest. Most of us don't take the time to gather and mentally put in order all of the spy-scandal bits that have been published so far. We need some pre-digestion of the data and the CCC is doing that for us Germans. By now, even the German parliament is often inviting people from the CCC to explain the implications of cryptography and other technologies in parliamentary comittees.
EDIT: After re-reading my comment, I must say that it sounds a bit too much like "Hurrah for Germany". Objectively speaking, the German reaction to the spying scandal is rather subdued and our parliamentary control of intelligence services is laughable. It's just that the situation is worse in all other countries.
People often conflate socialism and Soviet-style centrally planned communism or, alternatively capitalism and the market economy. I think it would be helpful to view the socio-economic spectrum in two dimensions here.
One axis is the capitalism-socialism axis, where you have a basic argument about redistribution and the role of wealth.
The other, and for the well-being of the economy much more important axis, is the market economy/planned economy axis. If you harness the power of evolution for you economy, there will be overall success. On the other hand, if all decisions are made in Moscow, things will suck.
Some of the more liveable places on the planet unite market economy and some degree of socialism. The nordic countries come to mind, also France, Germany.
Furthermore, while I do see the value in your proposition, I'd say that the pursuit of science alone has, going by historical precedent, proven to be insufficient. There are just too many examples of people ignoring the catastrophic circumstances that others are put through because of their scientific pursuits. Werner von Braun was justifying his work with the prospect of going to other planets. He probably wasn't happy that the V2 was aimed at London, or that he was utilizing an army of slave workers, but he sure as hell didn't let that stop him.
Then the article is disingenuous, because the same copyright period and liabilities exist in most EU countries.
Singling out Germany because a German company was first to sue is pure revenge.
If they wanted to protect themselves, they would block the whole EU and a whole lot of countries outside the EU, not just Germany.