If you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place. If you really need that kind of privacy, the reality is that search engines -- including Google -- do retain this information for some time and it's important, for example, that we are all subject in the United States to the Patriot Act and it is possible that all that information could be made available to the authorities.Bruce Schneier's response (on his blog) uses materials from one of his posts from 2006:
Privacy protects us from abuses by those in power, even if we're doing nothing wrong at the time of surveillance.European governments and citizens have traditionally been a lot more careful and diligent with protecting one's privacy. The global, connected, world we live in may just end up benefiting from such principles. For more information about Privacy Principles, I refer you to the OECD Guidelines on the Protection of Privacy and Transborder Flows of Personal Data.
Privacy is a basic human need.
Liberty requires security without intrusion, security plus privacy. Widespread police surveillance is the very definition of a police state. And that's why we should champion privacy even when we have nothing to hide.
Src: My Reaction to Eric Schmidt | Schneier on Security