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Since that's the case, why didn't Google just tell the NSA to write an Application and pre-load the NSA "security" application onto the device, just like "Lookout" security is pre-loaded. That way, the user could remove the NSA App or decide whether they wanted or needed the NSA's "help" with "security" at all.

Because security is better placed within the OS kernel rather than bolted on via an application later. This is why anti-virus applications are always stuck playing catch-up/cat-and-mouse. When the kernel is secure, the worst malware can do is install and behave like a "sanctioned" app, and when it's an app, it's easy to remove. Removing a core part of the OS, however, causes all sorts of breakage (see "Internet Explorer v4 integration into Windows 9x")

I wonder, by the way, if the Android OS would even function if a user, through the "open source" code, chose to remove the NSA code?

Almost certainly... removing security features generally won't break the system, just make it easier to exploit. Because Android is FOSS, why don't you try it and see?

(See what I did there? FOSS lets you look at the code, examine the purpose of that code, change the code to suit your taste, and see what happens as a result. Good luck ever being able to do that with Windows!)
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