Speaking of privacy, it looks like Google wants to violate it as much as government, only not for quite the same reasons. And actually, comparatively speaking, this idea of listening to my surroundings as I use my computer and using that to direct ads and such seems far more damning than anything I've seen government want to do.
So far, I haven't seen any government proposals for placing microphones and video cameras in all of our homes. But, then again, I'm sure Google will make it an opt-in service, and easy to shut off. In which case, I see no problem with it.