Independently, Matt Cutts and Tim O'Rielly wrote posts on Google and privacy last week. Matt and Tim both note that Google is being held to a higher privacy standard than other firms who have far far more data on us (e.g. ISPs, credit card companies, credit bureaus, etc). And they're right.
Our ISPs see every click we make. Many ISPs then turn around and sell our clickstreams to aggregators like ComScore. We don't have an option to opt-out, and the ISPs don't share the revenue from those clickstreams with the clickstream creators (us). Similarly, the credit organizations see our every transaction, sell those data for profit, and have remarkably sloppy data practices to boot. I once found a car loan listed on my credit report that wasn't mine. The bureau removed that at my request, but the casualness of their match logic was sobering. Others have noted this sloppiness too. In a comment on Tim's post, Don Marti of Linuxworld suggests one reason privacy debates focus on Google is because they can actually collect data accurately: We hold Google to a higher standard because they're smarter and have better data. Equifax customers can buy a credit report on me that says I started working two years before I was born.
The realization that other orgs know more about us than Google clearly doesn't absolve Google from scrutiny of how and why it collects data. Rather, this realization should motivate citizens (and our goverment officials) to drag these other organizations (ISPs, credit card companies, credit bureaus, etc) as well into the bright lights of the modern privacy debate.