Here's why I do at the time of this writing: Google needs to maintain our collective trust or it would destroy itself.
Google has the most valuable stream of *real time* information in the history of the world. From emails, Google Desktop, searches, blogs, phone conversations, faces and scenes from billions of images, to networking our personal genetic information and emerging computational intelligence.
From my stream, Google rewards me with tools forged from the ore of my personal information. It also rewards advertisers with extremely targeted information which makes their advertising dollar go much farther and advertisements increasingly match what I would be interested in. Google is the up-to-the-second broker.
So, from this *real time* info stream, Google develops it's revenue. Failing to honor privacy would trigger a devastating market revolt. Google's real time river of information would become a trickle. The revolt would create a vacuum searching for the next "Do No Evil" entity. It would be suicide.
On this logic, I trust Google with my personal information. Tomorrow I may change my mind.
Wider Discussion at the "Raw Feed" Here
Latest info here.