That's assuming that the "people" know what's best for their country. It doesn't take a genius to figure out that at least half the United States must be wrong about what's best for the country, since only half of us can be right. Democracy as mob rule is barely better than no rule. Jefferson had an idealistic vision of a country where the government existed in name only and everyone could manage their own, individual affairs. That's a pipe dream, although Jefferson is famous for his vast capability for self-denial. Any realistic, functioning government will have to hide things from its people, if only to hide things from other countries. The US military doesn't want to give away the specifications for its latest weapon systems to other countries, so they must be kept secret, from the US public as well as the governments of other nations. A government that can't hide things is a government that can't function.
No, they let people know what was really going on, which pissed them and some other groups of people off.
If it actually strains US/EU relations to have information released, then all the more it should because that means something is definitely wrong there.
Are you implying that you have never said anything about someone behind their back and you wouldn't want them to hear? Such things are basic parts of human interaction, and it's no different with governments. I'm sure EU nations get together to snicker at the US as well, but it doesn't help anyone to put the snickering on the web.