Judgement matters... If you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place... If you really need that kind of privacy, the reality is that search engines - including Google - do retain this information for some time and it's important, for example, that we are all subject in the United States to the Patriot Act and it is possible that all that information could be made available to the authorities.
Schmidt's statement is clearly pragmatic. One might even argue there's an implied criticism of laws like the Patriot Act. Could he have phrased it better? Yes. He shouldn't have said the sentence in question. But next time, actually read/watch the primary source so you can get the full picture. His closing remarks completely change the tone of the conversation. Are you really going to let The Register do your thinking for you?