I think it's really simple, for example even though I consider my bank account balance private there's probably quite a few people at the bank that at least theoretically could look at it. If I use Google apps to write a letter I consider private, it's in much the same situation. And yet, most letters I write are significantly less important or private than my bank accounts. "I can't put my letters on Google, or people would see what I write" is a bit like "I can't put my money in the bank, or people would see how much money I have". Many companies live that way too having outsourced all their basic IT, for the most part this works fine. I can see how Google doesn't provide total anonymity or privacy yet good enough for many people and those remaining people it isn't possible for Google to serve.
If you want total privacy and anonymity, you can't rely on anyone else. You have to do it all on your own computer, use anonymous networks, connect directly with your peers and not over backbones like email or facebook or skype, in short it's a whole different game. And if you're really paranoid about it, you probably want to encrypt and physically secure and make tempest-proof and screened software and... the list really goes on and on, and it doesn't stop until your computer is as secure as the deepest vault at the Pentagon. Google apps isn't the place for Top Secret documents and if that's your standard then neither it is for you.
It's all a matter of using it with reason. If you're using a google web app to edit pictures before putting them on your facebook or myspace or photo sharing site, what have you lost? Nothing. You were going to put them online at the mercy of a company and their privacy policy anyway. Which may or may not be a good idea in the first place, but at least it's fairly consistent.
