Much like radio stations that now have censorship, no one is forcing anyone to use google, if you do not like them, change your service.
If you are so afraid that some data may get out there, don't use it.. Roll your own servers, and provide your own stuff. Anything and everything that google does is optional to use. There are plenty of other video sites, they may not have as much as youtube, but they are out there.
The amount of money needed to keep a company like google going is huge. Hell just the other day 8 million people watched live a video online in HD for almost 3 hours. Name another site on the net that could do that kind of traffic? Gmail has almost 500 million users.
Google provides a great product, and they are unifying everything across the board, I for one love all the unification. Why fragment everything?
If google burns me, somehow, then I can go switch to other services, run a maemo phone, start developing my own stuff and there you go.
Both microsoft and apple also have similar privacy policies, so if you are going with the big 3, and have privacy concerns then you will be missing out on what is going on in the world today.