How do we stop this? I don't know if we can, but we can try.
If everyone who uses any google product were to give google one piece of feedback every day objecting to that new policy and stating it plainly to them that:
Any retention of my data, even blinded, for longer than 90 days is an evil and unwarranted potential intrusion into my privacy. Google may still be trying to live up to "Don't Be Evil" but we cannot believe that you will always be able to protect all of our data, no matter what happens to your servers, your company or to the country under whose laws you primarily operate. Please stand down from perpetual storage to "90 days to oblivion".
If this goes viral, google will have to change. Will the rest of the 99% hear my voice and use the people's microphone? It's the only way I can imagine we'll get through to power that still thinks it's not evil so that maybe they'll back off.