Google Apps are like junk food, bad for your health/privacy, but very good in taste/product otherwise.
Think about it, Google Maps is (I think) the biggest collection of map data and information on locations everywhere around the world, yet I don't want an advertising company knowing that I just went to a fast food place.
YouTube is an endless trove of video content that anyone can contribute to, yet I'd much rather not give an advertiser information on every little interest that I have in video.
Yes, I too covered Google's craziness on my blog. But indeed, people respect their privacy when they are in eye to eye, while when we are in online-they don't see the backstage bounty process, so they sign up without caring about their privacy.