Yes, I think spy agencies should be able to spy on foreigners, and swap data. I don't think it's insane for the laws against collection of citizens data to include not trading for citizens data with foreign powers, such that the set of people that the UK and US spy agencies share data on is the disunion of their respective citizens. As with many things that involve crimes of thought or information, it's very hard to implement, and as such you should be careful how you phrase and prosecute, but that's a risk that has to be taken... And the penalties for when it's discovered should be appropriately severe to make up for that.
in response to your first question, yes of course. it's thier job.
w.r.t. your second question, this is where things start to get grippy. see my response to another question referencing "realpolitik". in this context, then whether or not they should becomes a secondary consideration at the policy level.
I'm not particularly emotional about this, at least not in the "getting irrational" sense. And I'm not against intelligence agencies in principle, I acknowledge that we need them to some level.
The difference is that I come from a country where secret service (both domestic and from other USSR-friendly countries) used to be almost almighty ~25 years ago. And I've seen the damage it inflicted on the society (including some family members) by eliminating any form of dissent or sign of disagreement with the government. Considering how much cheaper and easier dragnet-like surveillance got over the past few years ... well.
You may point out this particular case (compromising SWIFT bureau) is different, i.e. it's the type of action you'd expect from NSA-type intelligence agencies. But it's a mistake to see the agencies as independent / isolated entities. The rest of the leak is however interesting as it shows how hoarding of NOBUS 0days fails, because it's never really NOBUS.
1) yes of course I know about HN demographics
2) you should care about that distinciton because this is true for any nation/state.
until such time as we evolve dramtically as a species these types of organizations have a place. it's distasteful perhaps, but a necessary thing.
getting emotional about it impedes a rational consideration.