The question was posed, "What bad does someone expect to happen as a result of this[?]". So I'm putting on my least-charitable-to-Google hat. I'm not trying to make the most accurate predictions.
> They specifically claim not to though
That additional vector for monetization still exists. I stand by the statement that the ability to make those ad-relevant associations enriches Google. They are not necessarily monetizing that part of their empire right now, but they've pivoted other products in the past from "we're just trying to improve the Internet for it's own sake" to "we use this for advertising".
Privacy policies change all the time, often with little warning. There'll be a post here on HN if it happens and a bunch more techie folks will switch their DNS to 1.1.1.1 or something, but lots of people will just stick with 8.8.8.8, many of them unknowingly. Perhaps unknowingly because the Google address has become so common that FOSS projects are using it as a default.
Yeah, but I got this uneasy feeling about relying too much on google services. Their policy can change in the future, and when it do change, we will scramble trying migrate to something else, only to find that the competitions in the space has been killed. Think about Reader, when they shut it down, there were no good alternatives for users to migrate to. Also google maps api, when they suddenly jack up the price and there were nothing the users could migrate to.