Maybe the wording will be slightly different but I doubt they outline exactly what they do with it otherwise people could be horrified.
I don't disagree, but I think some people, who like myself, have a casual interest in Big Data (tm), would be absolutely amazed and fascinated by what they do with it. I might even be willing to give out more data than I do now depending on how intrusive I found their processing.
Privacy is good. So is convenience. If I knew that Goog would do nothing with my location data other than things I approved of, and a little adveritise as that is their raison d'etre, then I might give them access to it and let them make my life more convenient.
At the moment, Goog (and others) behave as if they have something to hide because they are ashamed of what they do with our data. Sort of makes them hard to trust with still more of it.