If I am not mistaken, Google has some kind of relationship with Godaddy which I think started a year or two ago. Does this give Google access to information which allows them to identify owners of domains that use the privacy option?
Speaking of Daddies, what is BigDaddy? Is that some kind of Google update like Florida or something?
As for "BigDaddy", in 2006 Google migrated to a new infrastructure that gives them a lot more flexibility and computational "elbow room". Internally, they called this infrastructure "Big Daddy" and the many significant changes in the SERPs that came about during that migration got named the "Big Daddy Update."
I remember a thread from a couple of years ago when Godaddy site's were not being spidered by Google due to what Godaddy said was a technical glitch and very soon after their PR was gone, as were many customers (myself for one). I do register my domains with them, but moved to another host after my site was nearly lost. In many ways I'm still recovering 2 years later. Google surely sees Godaddy as a top registrar but as a hosting company I still can't trust them!
I'm the first to admit that I'm a pure HTML person and not nearly technical as many here. Tedster, you posts often make me feel like an infant and although I don't understand all you say you have surely along with Webmasterworld members helped me very much in my journey.
"The thing that frustrates Google the most is that in their organic search results ... it hurts the user experience when someone clicks on an organic search result and ends up at a parked page. So Google can get their hands on a significant amount about the domains from GoDaddy beyond just becoming a registrar."
That makes sense to me. It also makes sense in helping Google clarify the (possible) relationships between junk domains. For example, the same person owning 4 link farms and 15 MFA sites. Any new site that person brought online would naturally be suspicious.
What concerns me is Google putting everyone under the microscope who owns and/or manages multiple domains, given their propensity to penalize. It would be unfortunate to find that problems with one site would affect rankings on others. I'm not saying that this does currently happen (it might or it might not, I don't know) -- I'm just saying for me it is a potential concern if they were to buy the GoDaddy database.