“Where does it stop?” My point is that it shouldn’t stop anywhere. Insofar as the U.S. government acts outside the territorial United States, the full measure of constitutional constraints should apply to those actions, including (but not limited to) Fourth Amendment prohibitions against unreasonable searches/seizures and Fifth Amendment Due Process guarantees. This is a necessary check against arbitrary exercises of sovereign power.
Regarding the Ninth Circuit’s role in this, you seem to be objecting to one of the primary ways that law is created in a common law system—that is, through judicial decision. This case might very well go to the Supreme Court, and it might very well reverse on the basis of Verdugo-Urquidez or something else. But bear in mind that the Ninth Circuit would have been making law regardless of what they held on this particular issue, because it was a new question in that court. In other words, this sort of “unilateral” interpretation of constitutional provisions is precisely what courts are tasked to do when facing a new issue, and the interpretation would have been unilateral regardless of the specific outcome. The only other recourse would be for the court to refuse to consider the question at all, which would simply be an abdication of its role as an interpreter of law and an arbiter of disputes.