In exchange for free mails, would you let your postman open your letters, read them, and insert ads related to their contents?
This is a common analogy for Gmail’s model. The privacy implications of using Gmail actually go much farther than that, because Gmail is not only your postman (with Gmail), it also owns your car ( your web browser), your address book (with Search), your TV (with YouTube), it’s a great land owner (with AdSense)… And there are many reasons not to trust Google, especially with your privacy.