Among the key differences between GAE and the consumer service is that GAE includes a FERPA clause. This clause stipulates that Google is subject to FERPA in the same way as the college is, and must process educational records (such as emails to students) accordingly.
In our discussions within CIS, we were struck by the fact that what Google is doing seems so much part and parcel of the tracking we are all subject to, both on and off line. Retailers have been doing it for decades, as we learned from a NY Times article about how companies learn your secrets. I find it fascinating which practices and policy changes get noticed, and which don’t.
You may also find these Chronicle, Educause and Campus Technologies posts of interest.