Their current argument is that they aren't actually collecting that data- just getting permission to- but that's kind of sketchy and still leaves them open to other changes that do start collecting things.
The other big issue people have with this is that the use case they're talking about- accidentally logging into a site and not logging out- is an issue with all websites, not just Google. Adding a UI for Google services explicitly is something only Google could do, which makes their browser less "neutral". This is why people keep bringing up antitrust. By taking advantage of their monopoly to further entrench that monopoly they are breaking the trust of their users.