Earlier quoted context omitted.
Blamed and shamed for what? I suspect most people are more than happy that they can carry their existing settings across to a new 'phone and it Just Works™...
It's convenient for the owner of the Android phone, but the wifi password is not necessarily theirs to give away. That's the problem. It's not because your friends and family have given you their wifi password that they intended to give that password to Google as well. You're trading their security for your convenience.
I'd like to see routers using the passphrase to generate a long lived authentication token. "Good netizens", as the phrase goes, could ensure their routers / client devices didn't store passphrases without inconveniencing the end user.