On the other hand, I don't really feel like there's an actual "evilness" behind the words to match up with the "evil" sound of the words. Someone truly interested in leveraging the potential evil would hardly going around making gawk-inducing statements like this. It's almost cartoon villain-ish (and thus gets headlines).
I've tended to think that it's the "well-meaning but poorly-worded summary of what the engineers are saying that contains poorly glossed, uncomfortable truths" explanation that's behind these statements. But that seems a little weak; shouldn't the CEO be better at that than Schmidt is? (Or if he truly isn't, why is he still CEO?)
So it occurred to me reading this one, that what if it is that Schmidt is deliberately "bungling" to try to warn us to caution, in his positive-spin, pro-company, CEO kind of way? Maybe the "foot in mouth" is precise and intentional, designed to get press and shake people up on the topic?
To sidestep the (valid but long and out of scope) discussion of "well, why doesn't he fix the problem?", from a business perspective, he could hardly full-stop the company on data aggregation. Even if he did, Google isn't alone in its data aggregation and more companies are jumping in on the game all the time.
Maybe Schmidt is actually risking the flak to make the point. Maybe he's not as culturally different from "the Good Google" as many seem to think he is. Or maybe he really does have an anti-gravity ray with which he will steal the moon and Miss Penelope Pureheart, bwahaha.