Let's be clear about it: sensors are fine, and so is collecting and analyzing data from them. It's the cloud-based business model that's the problem.

I completely agree - but I'm inherently distrustful of automatically uploading this data to the cloud, vs. doing local computation. How can I trust a company to keep my data private and secure?

I'm distrustful too. Actually, the litmus test I use for cloud companies is: is the data in practice mine or theirs? In case of sensors - can I grab the data log for myself? Export it to CSV, or at least an Excel file? If they offer a helpful "analytics" platform, do I get to upload the data I previously exported? Do I get to export the results of the analysis?

If the answer to some of those questions is "yes", then I can believe the company wants to provide me value. Otherwise it's a clear signal they just care about extracting value from me. Most of the cloud startups fail this test, therefore I refuse to use (or even get interested in using) their "service".

Notably, the one company I end up using for everything cloud-related is Dropbox. No surprise there - they simply built "a folder that syncs".