Are you totally crazy? point 1 = end of privacy, freedom and sanity which is why we must pray that it will never, ever happen.
2. Even if it does happen, that doesn't mean everybody would be forced to use it. If you don't want to put your data on Dropbox you don't have to.
3. From a technical perspective, isn't it premature to conclude that hosting all our data means the end of privacy? For example, I can host all my data on my own server and connect all my devices to it without compromising my privacy. I am sure smart people are working on other solutions. (I think the end of privacy will pretty much happen anyway, but I'm not sure that cloud computing will be the culprit.)
Agreed on that one.
Moving everything into the cloud will just speed things up for the culprits ;)
I think you're underestimating the security of Google's servers and overestimating the security of your own computer.
IANAL but I have experience in this rough area. That is pure scare mongering and I don't think there is even the remotest possibility they would get away with it. If they even tried Google would wrap them in counter-defence so fast it would be funny.
Also, for the record, your search history may be criminally suggestive but it is not something they could use to actually prosecute you (this is something I do know about). They still need a subpeona on your personal machine :)
Fishing is expensive; forces tend not to do it too much (despite what the politico's want to suggest otherwise). :)
This is somewhat a non-argument because subpeona's are easy to serve against you now. THe argument that they might be easier to serve on a company with no emotional attachment to you is countered by the fact that they have a much much bigger legal pocket and a desire to keep a "good" image to the public (by refusing banal subpoena's).
As to:
> and no black hat on the planet can break into my wallet without being in immediate physical proximity to me.
Maybe not. But any old pickpocket on the street can. Indeed there are more people that can steal your wallet than can break into Google's servers :)
Of course, this would raise the storage cost because the service provider can't use deduplication on all the user's data. The storage provider also would be unable to use data mining on the data. Thus, it probably could only be offered as a payed service.
Anyway, the first major cloud dataloss will put an end to that one. And that's only a matter of time.
I am willing to bet you on this. Big datalosses will happen, and people will for the most part continue doing what they did before, because they don't know better, because it's less of a hassle, or because the cat's already out of the bag. Look at the long list of data losses and privacy breaches that have happened in recent years:
http://www.privacyrights.org/ar/ChronDataBreaches.htm#2005
These haven't significantly changed the way your average person protects their data. People continue to put their data at risk in ways that boggle my mind, but we hackers have to be careful not to assume the average consumer shares our tech savvy and concerns for privacy.
As for the question of data loss: sure, a cloud provider might lose your data, but then again you might spill coffee on your laptop and do the same. (Again, "you" meaning the average consumer.)
But the other comments are spot on too, it's all in the air, but Facebook's and Google's recent attitude of you shared so you're damned has left me gravely worried about our future.