The story is of interest more in terms of its precedent than for any actual privacy concerns. The data cannot be traced back to any personal information of individual users, and Google's objection was more over the burden of compiling the data than defending privacy. Boing Boing.net has several posts about the story from the perspective of EFF supporters.
Also getting the rebuff from Google were BellSouth and Verizon, who have been moving to charge high-bandwidth sites additional fees to support the cost of the network. Critics have been (rightly) comparing it to a virtual protection racket. Here's Peter Pollack's take on it via Ars Technica.
To complete the Google trifecta, Ars Technica is also reporting two Gmail discoveries: the long-overdue addition of a delete button, and the revelation that the service doesn't properly distinguish periods in account names, which can result in misdirected mail.
Look forward to more SFist Tech Labs roundups, featuring more of your favorite tired internet phenomena like facts about Chuck Norris, the dancing baby, “you're the man now dog,” and even the hamster dance! Collect all 5!
Image from the game Zero Wing, as well as about a billion different fan websites