At least according to Issue 57560:
The “Back up my data” option in Android is very convenient. However it means sending a lot of private information, including passwords, in plaintext to Google. This information is vulnerable to government requests for data.
Ignoring the implications of google knowing yet another bit of information about us, or the tinfoil hats when you combine this information with the previous scandal with them capturing and saving encrypted wifi data from the street view cars, where are the pitchforks? If Apple did this, there’d be a class action lawsuit already (even if the story was completely different, it’d be filed purely on the headline).