And regarding this bit:
> I'm not saying that if you use 8.8.8.8, you'll search ads will target you.
Hm, well others here have been suggesting this would be the case.
> But I would bet they use your anonymized browsing history to fight bots, test internet speeds at various locations, identify browser technology, and who knows what.
Even if I take this at face value, how are these things you listed bad things? If my DNS queries are going to fight bots, by all means, please fight bots! If they're going to help them improve internet speeds, by all means, they should do that! That's what data is good for. Everyone here is freaking out about privacy, not improved service. (!)
That said, they are selling a service, and you're paying for it. Quite a bit for it. It would be pretty stupid for AT&T to use your DNS data and risk your $150/month cable, phone, internet subscription for an extra buck or two.
But with Google, you just don't know and their entire business model is predicated on selling your data. They are almost certainly using their DNS servers for some data-based operation.
And a last quasi-technical point... I'm sure AT&T and Comcast have good engineers on staff, but I'm even more sure that Google has better ones. I am less concerned about AT&T and Comcast because I honestly don't think they have the wherewithal and talent to come up with ways to monetize DNS. I'm pretty sure Google could.
And to your point, even if Google is giving away DNS services to only fight bots and measure internet speeds, they should at least say that in their privacy policy. They don't. They just say they keep detailed data temporarily and anonymized data long term. I don't use Google's DNS because I really have no clue what they're doing with it. In contrast, if my ISP does something, I can always try to sue them, or if that fails cancel my service.
https://www.eff.org/deeplinks/2014/11/verizon-x-uidh
http://www.latimes.com/business/la-fi-lazarus-20150818-colum...
There is no point in discussing what companies might do in some theoretical framework - they do not care about your privacy, they monetize NXDOMAIN, etc. This isn't about what might happen - these abuses have already happened.
Even if you have an evil ISP, and they're selling your data for $0.50/month, you're still paying them $50/month for service. A bunch of angry customers could change their policy quickly. Few ISPs would try to squeeze those extra quarters from you, given the potential blow-back (some do, and they'll get their comeuppance). However generally, ISPs incentives are to keep you as a customer and get your fitty beans every month.
However, with Google, it's not clear why they are giving DNS services away for free or what they're getting in return. It clearly costs them some money to do so, and they're not being paid for it directly. It's possible that they're doing it purely altruistically, but they also have an extremely long history of using data for advertising or other forms of monetization.
I'm not saying that if you use 8.8.8.8, you'll search ads will target you. But I would bet they use your anonymized browsing history to fight bots, test internet speeds at various locations, identify browser technology, and who knows what.