Some people use quotation marks for paraphrased quotes.
Right. And some people don't know what they're talking about and like to put words in other people's mouths. If you're going to quote someone, quote them.
What was actually said in the oft-misquoted Schmidt interview:
"I think judgment matters. If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place, but 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 to remember, for example, that we are all subject in the United States to the Patriot Act. It is possible that that information could be made available to the authorities." -- Eric Schmidt
Note that isn't a paraphrase. That's a real, gen-u-ine quote. I don't agree with him that the desire to maintain privacy is any way linked to whether I should or should not be doing something. But what I find even more interesting is that in the same breath, we're being warned about the Patriot Act. We're being told without actually being told (because that would be illegal) that Google is being served with Patriot Act requests. Nobody ever seems to key on that though.
Back on topic - nowhere does Schmidt say that privacy isn't important. I understand and share the concern over how much data and meta-data Google has access to. I'm even more concerned over the possibility of Google changing hands or Government access to data (i.e. Patriot Act). But let's limit criticism and concerns to real issues. The real issues are enough without making crap up.
Unless, of course, making crap up is part of a larger agenda.