Doesn't matter. We bugged their chancellor. The leader of the entire German nation, and even she can't keep her stuff safe from our ears. That sort of thing undermines their sense of safety, their sense that they have power over themselves and their national security. It scares the hell out of them even if it shouldn't.
I'm afraid that's not really true. Of course I can't speak for all Germans, but I don't get the impression that anyone is surprised over here. Of course the US intelligence agencies are trying to spy on us, that's what everyone expects them to do. The reaction is more that (a) people are pissed with the government that they're apparently easy to be spied on and (b) want the government to take a stand toward the US in response. And for the somewhat more clued-in (c) disappointment that the government seemingly cares more about Merkel being spied on than German citizens being spied on at a broad scale (by both the NSA and the BND), when that deserves so much more attention.