First, Google has proposed scanning the text of all incoming emails for ad placement. The scanning of confidential email violates the implicit trust of an email service provider. Further, the unlimited period for data retention poses unnecessary risks of misuse.I believe the second point alludes to the fact that Google has admitted that they may keep users' emails in their system, even after users' have deleted them. The letter elaborates, giving some worst case scenarios.
Second, Google's overall data retention and correlation policies are problematic in their lack of clarity and broad scope. Google has not set specific, finite limits on how long it will retain user account, email, and transactional data. And Google has not set clear written policies about its data sharing between business units.
Third, the Gmail system sets potentially dangerous precedents and establishes reduced expectations of privacy in email communications. These precedents may be adopted by other companies and governments and may persist long after Google is gone.
These points definitely seem worth considering, but many folks will probably ignore the privacy concerns if it'll get 'em a gig of email storage.
Also, I wondered about this and sure enough: Google's run into a trademark problem with the name Gmail. Seems a Californina company has been using the same name since 1999. I stumbled across this second one myself.
Which raises the question, didn't Google, er, google "Gmail"?
(Via John Battelle)