Their stated goal is to "organize the world's information" but notice there's never a qualifier of the world's public information.

While they've been able to determine a ton of information about social circles from interactions (gmail, voice, gchat, hangouts), the real understanding comes from G+ where we've categorized our contacts.

Odds are you have circles that represent locations, employers, family, friends, clubs, etc. By analyzing those groupings, they can determine the relationships that aren't obvious just from the interactions.

Now, combine that with the previous information and they know when you're talking with someone from HR from another company and how closely that company is linked to yours via shared/common circles. Sounds like a opportunity to sell an ad for 401k rollovers. :)

That was my though exactly when I started, but I've realized that Google gains a greater power than showing tailored ads. Google remembers who I was better than I do, knows everything that I do today, and can probably guess who I will become. They have the power to shape the information I see and influence me to do things that will drive their bottom line with unparalleled precision.

We're really giving Google the power to read our minds: are you comfortable with that?

Aside from that, I'm vaguely concerned about keeping everything about me so centralized. There's too much to lose too easily if someone manages to hack me despite the 2FA and insane passwords.

I'm a little biased because I currently work at Google (not on anything related to ads or user data).

Still, I am comfortable with giving Google enough information to understand and predict my behavior. The more I learn about the company from the inside, the more I trust them to do the right thing with my personal information to prioritize my quality of life over their bottom line. My perception is that Google genuinely believes that if they create high quality products that improve their user's lives, the revenue will follow.

As for centralization, I agree that it is good to diversify for robustness and security. Still I trust Google's security measures more than I would trust my own if I were to set up email servers myself. Plus now that Google properties have U2F support and Chrome autogenerates passwords, I don't mind putting all my security eggs in the Google basket.