I used to know some people who worked at the NSA, and while they did seem slightly more authority-acceptant than the average person, they did not seem otherwise unusual. But that's the banality of evil for you.

Actual question: is it morally defensible to work on programs like PRISM, or is one bound to decline the offer or quit rather than accept such a posting?

First thought: it might be analogous to being a defense attorney, whose job is to do the best lawyering possible regardless of one's personal feelings for the client. That's a morally defensible position to uphold, since the premise of all trials is the balancing of two antagonistic interests. But it's unclear how it would map on to this case. Non-nationals who are suspected of real or potential crimes is an instance where vigorous spying does function symmetrically, since one assumes the intentions of such people are hostile and they are actively seeking to avoid detection. American citizens, or non-citizens who are not planning to engage in any such actions have no reason to suspect their actions and behaviors might require protection.

On balance, the better analogy is to guerilla/partisan warfare or (heh) terrorism: the guerilla or partisan derives their entire strategic advantage from looking exactly like everyone else. They trade on the unwillingness of uniformed soldiers to randomly attack or harass those who look like civilians. The guerilla cheats the laws of war by not being willing to fight openly (to be sure, this doesn't mean a partisan or guerilla cause might be unjust, only that insomuch as it does this it violates the developed ethics of fighting war--jus in bello is not jus ad bellum). So also with the NSA. It requires the fact that it doesn't look like it's doing anything at all to provide cover for the things it does, and relies, crucially, on the inability of the average person to act as they would if they knew they were subject to monitoring.

The jus in bello/jus ad bellum distinction is quite useful: the means used to fight for a cause can be unethical, wrong, or evil, even if the cause itself is worth fighting. This is a commonsense observation: we have police to prevent and fight crime, but this doesn't mean the police get to do whatever they want. One would have to conclude the same here, that to engage in untargeted spying is wrong, full stop, especially of those who have committed no crime in the first place. One would be morally bound to refuse such an assignment. Which, I guess, leaves us to hope there are a lot more Edward Snowdens out there.

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