This is fantastic, actually. It flies in the face of end users, and there will be blow back.

Power users won't stand for this sort of thing and will switch to Firefox. Firefox, in turn, will gain greater development mindshare.

In aggregate, these privacy and "ads above all" stories will continue to taint the Google brand. Many of my layperson friends are starting to worry about their privacy when using Google products--it's a good thing!