I've been building professional web applications for 12 years and everywhere I've worked, we built the most complete profile of our users that we possibly could. There is really no other way to operate. When there is an issue, the first question is, "How many users are affected?" You need to know as much as possible about the user in order to answer this question. Usually, that starts with their browser, operating system, and IP address.
The second question when an error occurs is, "How did this happen?" For that, you need a history of everything every user has done. Web applications are not the only ones who collect or use this information. Your operating system, browser, the domain name system, your ISP, and every hub and router that your communications pass through has to have some level of logging, auditing, or tracking in order to function correctly (this logging may normally be turned off, but it's there, or can be installed). Unless you break into someone's computer, the web has never been anonymous. Something like Tor can create some anonymity. If you are really concerned, use Tor.
Last night, someone on On Point suggested using Yahoo! mail instead of Google mail, but Yahoo!, Twitter, Amazon, Microsoft and others are trying to collect every bit as much information about you as Google is. The only reason that Google might collect more is that Google is just doing a better job of capturing everything.
I think what really upsets people is that Google has been so successful at using this information to target ads for people. Without the targeted ads, the information collection is not visible to the end-user. All of a sudden, it seems like Google and Facebook are doing this terrible thing, when really, everyone is doing it and you only see the results when you use those products.
Having paid to advertise using Google Adwords, I can say without a doubt that when Google shows you an ad for Type II diabetes, they are not telling the advertisers that you have Type II diabetes. The advertiser does not know anything about who you are, just that someone, somewhere used the word "Diabetes" and that Google showed your ad, and whether or not someone clicked on it. Google has a program that sees the word "Diabetes" in your profile and that fires ads that also have the word "Diabetes" in them. They are not disclosing anything about you to advertisers.
I joined Audubon last year, and within 2 weeks, I had requests for donations in my mailbox from The Sierra Club, The Arbor Day foundation, and half a dozen other environmental organizations. There is something very ironic about receiving a pulped, dead tree (paper) in the mail from the Arbor Day foundation. I felt mildly violated, knowing that my gift to Audubon resulted in them giving my address to a bunch of other organizations, who I then had to call up and ask to be removed from their mailing lists. Where is the outrage against these organizations? Why the outrage against Google and Facebook, who have never given my street address or email address to anyone?
If you share your Google login with someone else, or use your computer where someone can see your screen, how is Google supposed to protect you from that? Tell other family members to get their own profile. If you don't want to see adds for divorce lawyers, don't discuss divorce with friends in email - use the phone or talk in person. People don't read porn in public. Why should they expect to surf web sites in public that they don't want other people to know about?
I cannot imagine any meaningful way to make the web truly anonymous that does not also give hackers and spammers a huge edge over legitimate web sites and e-commerce. The profiling and tracking that every major web presence uses today is necessary to prevent spam from dominating our inboxes and forums, and also to catch hackers when they break in and steal or destroy things. True anonymity on the web, were it possible, might make e-commerce impossible and email unusable due to unstoppable vandalism, theft, and spam.
Most of the time, targeted ads are a good thing. If you have a nun and a gigolo, doesn't it make sense to show an ads for habits to the nun and condoms to the gigolo? Do you really want the reverse of that happening? If I'm going to have to look at ads, I'd rather look at ones relevant to me than irrelevant ones.
The targeted ads that are upsetting people so much are what pay for Gmail, YouTube, Facebook, and most of the sites people frequent on the web. If you don't want Google ads, you can pay them $50/year for Google Apps. For free, you get targeted ads. Live with it.