I love Google for the service values they provide, but if this were to come from another company then I might have believed it was in fact an error.

Privacy has always been an important factor when people consider any Google products, and they are fully aware of that so this topic must have always been on their list of priorities. For a company like Google with rigorous testing/approving processes in place before a product is even launched, to come back and say that it was an accident is pretty hilarious, though realistically what else could they have said?

I still like them. It's a love-hate relationship, we have passed the denial phase and entered the acceptance stage long time ago.