Setting up a password for an Android device only needs to be done once for each device->network pairing. The reuse of Wifi passwords across devices is an edge case given the predominate ownership pattern of Android devices - i.e. most people have a phone that runs Android and no other Android device.
Google's scheme allows them to harvest the passwords to a vast number of wireless networks.
Google has harvested the location, name and signal strength of many millions of wireless networks across the world - an act which can be in no way cast as user convenience.
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