Our opinions are not really as polarized as the posts so far might make a reader think we are. I like two of your suggestions for Google very much:
I'm at PubCon right now and last night in the casino I was talking to Matt Cutts about Google and privacy. The current company policy (but it's not in their "Charter" as far as I know) is that they will only cooperate with a court order for a specifically identified, single user/incident, but not with a demand for a range of personal data that extends over many users. In fact, gMail does not automatically disclose the user's IP address. Many other webmail services do that by default.
I also would like to see more explicit and locked-in policies and accountablilty - and even international agreements and treaties (including non-governmental watchdog organizations) about privacy and data collection/use. I just see Google as already further along in this needed direction, and feel that the article's atitude of outrage and fear-mongering is not helpful. Even the headline and the url keywords are over the top.
Twenty five years ago I was in direct marketing and catalog sales. Ever then, the amount of personally identifiable private data that could be owned for a few dollars was enough to make me quite concerned. There IS a big deal here, and we're pretty late to the party. But let's not make a party into a war.