FWIW, they're partially funded by Google Ventures- perhaps there is some type of technical compromise that doesn't break geographic tracking completely: http://www.yesware.com/blog/2012/07/18/how-does-yesware-trac...
This change makes all of that impossible: Google will (presumably) always request your image URL, whether the user opens the email or not, and the request will come from Google, with their metadata, not your target.
Why presumably?
If you want to be cynical, you can note that Google will still know which emails you opened and which you did not. Does the current Gmail TOS restrict them from selling that information to advertisers, or (more likely) using it to target ads? Probably not!
I suppose if they're clever, they'll figure out when a sender is serving a million copies of the same image to slightly altered URLs in the same email template, and forgo the requests, but either way, the sender loses the analytics.
I doubt any of this is done with the privacy of users in mind.