Earlier quoted context omitted.
If you're going to dismiss an argument as "horseshit", you should perhaps offer a compelling alternative. Because your idea of what is going on is frankly ridiculous. It's easy to see the user-experience story for this. Upgrade your phone, buy a tablet, etc, and as by magic all 10 wifi networks you use work without any configuration. No need to type that 32-character nuisance of a WPA2 password again, etc. How lovely…
Encrypt the data on the device. Backup encrypted version in the cloud. Download encrypted backup to new device. Unencrypt on new device. Merge versions on the device. No need for plaintext on Google servers. No way for monetization by Google. Or to put my alternative another way, how much is a data set mapping WiFi passwords to networks for the city of Bejing worth to a foreign intelligence agency or other state-leve…
So you want _yet another_ password between the user and his magical experience or whatever ?
I see myself as a "privacy enthusiast", and even I recognize that wanting to encrypt wifi passwords in this way would only appeal to ~0.01% of android users.
You could argue that google could make this an option hidden under the three dots / context menu / whatever that thing is called, but there's probably much lower-hanging fruit than this.