This is misleading. Google's DNS privacy policy is very reasonable. The only permanent logs are at the city/metro level. I trust their servers far more than I trust Comcast's or Verizon's. https://developers.google.com/speed/public-dns/privacy
I agree with you, but if Comcast of Verizon are your ISP, they can already see/log which sites you browse (Unless you use Tor or a VPN, that's it) without the need to log your dns requests.
So, as funny as it sounds, I use my ISP dns server for "privacy" (the right term would be "for not telling even more third parties which sites I browse").
However, this is not how things is commonly done. Most client machines simply sends this work over to their ISP (or google), and wait for the third-party to do it for them. The third-party then datamine this traffic in order to get revenue.
In general, what you willingly give to a third-party can never be seen as inherently private. Additionally, An intruder that want this information would have to hack, tap or steal the information rather than just leaning on the ISP/Google.
In addition, DNS doesn't send my GPS co-ordinates along with the request, so it will just be IP geolocation data which Google will collate for their own stats on their DNS servers (So they can see/log what regions people access from, etc.).
Just because it mentions storing location doesn't mean they are trying to monitor every step you take when using their DNS.