Android sandboxes far better than iOS. It has a more granular, integrated security system.
The existence of "anti-virus" and task killers speaks more about customer ignorance and the placebo effect than it does to the platform.
I think the App Store review process is actually dangerous because it implies something that isn't true. Apple makes zero guarantees about the quality of safety of the applications.
I find it funny, that image, as if some random bloggers "indictment" should motivate Google to action. They're handling it just as they handle Youtube, and I think it's brilliant. If you see your material in the Market, file a DMCA. Problem solved.
Yes, customers ignore permission warnings, but again, that's an unrelated issue, and surely you're not suggesting that Apple's lack of a permission list is better simply because users sometimes ignore it when offered.
In terms of security, both from a disclosure, per-permission level granting and sandboxing perspecitve, Android has a superior model.
However I actually think there is a perfect medium somewhere in the middle: Granular permissions that allow for curation by an optional third party. That would be an ideal situation for the market, where Grandma or Joe User can select from a number of curation sources (or punching it in directly) where reviewers rate by quality, assess if the permissions are appropriate, etc.
An important point, considering "flashlight" apps that managed to sneak in SOCKS proxies. No doubt more nefarious things would be difficult to do as a non-super user, but it does seem a false assumption to trust App Store apps implicitly.