[citation][nom]n1kn31m[/nom]admittedly there could also be a benefit from all this..officer: "where were you sir on the night of the 24th between 2000-2200?" hehe..[/citation]
That won't hold up as evidence in court. The location data only shows where the phone was, not where you were. You could give the phone to a buddy, while you're robbing a house across town. The tracking data has very few positive uses, and NONE of those uses require them to STORE the tracking data for any extended period of time.
That's the real problem here. The phone is storing a history of where you were and when. Even if it uploaded data to improve network or hotspot availability, there's no reason to store this info long-term, nor is there a reason to back up this data to iTunes. It should have an opt-out option, that doesn't completely disable regular location functionality (it could store your last known location only in this mode, and update it whenever your location changes). When enabled, it should wipe the data whenever it sends (anonymous only) or after it becomes 48 hours old, whichever comes first. No saving to iTunes, no long term storage.