You started by saying that it's difficult or impossible to define what 'serving the user' looks like, then immediately gave examples of what it would look like to you. It's not that Google can't do these things or is afraid to, but rather that operating in your best interests does not benefit their shareholders. Sure, it'd be great if we could all just get along, but we're living in the worst case scenario you describe because we can't all just get along. Not trusting companies like Google with your personal data is the pragmatic choice; regardless of what they could do with our data, what they actually do with it is what counts.
Side note: they know exactly where you live. My colleague's Android used to tell him, without any prompting or specific configuration, how long his drive home from work would take that day. That was over ten years ago.
Yes - I meant 'impossible to difficult' to define to all people, at all times. Agree it's easy for me to define how that looks. It doesn't mean that the same is true to you. That's why I went from a very general, to very specific.
I'm saying we ended up in situation where people are lying when they say "I don't trust Google", b/c they have Gmail, use Google services - so their trust can't be zero. It's more than zero. Obviously it's a trade-off, people are pragmatic they do their cost-benefit analysis, and act accordingly. They just lie when they talk about the subject. I think it'd be better for all, if the public discussion moved from "I trust Google zero" (which is obviously untrue), to "There is cost-benefit to this, and I personally chose xyz".