This argument applies to any web service. There's no guarantee that a $5/yr paid web service isn't profiting from your data the same as anyone else. Why only make $5 when you could make $35?

It really boils down to who you choose to trust with your data. As an insider, I'm very happy with the privacy controls within Google. I'd be more worried about a less well-established player, regardless of whether they charge a fee for their product.