In spite of the privacy concerns, I don't understand why Microsoft would need many of the types of information being recorded.
If I buy a new car, I would understand if the car maker recorded telemetry detailing how the engine is running or whether the brakes are overheating. What I wouldn't understand, is if the car maker is monitoring what brand of beverage is sitting in the cup holder or whether I like to store jeans or large quantities of fruit rollups in the trunk. None of that data should have anything to do with the general mechanical operation of the car.
I understand that some types of data can be used for marketing purposes. I'm willing to bet that much of the data MS is collecting will be monetized for that purpose and isn't really meant to be nefarious; however, that is a line that was traditionally crossed as a compromise for using free software. As a paying licensee, I find it insulting and degrading. And that's the stuff they comp to. Not to be paranoid, but Windows has bugs. Just because they tell us they added a way to turn off said tracking doesn't mean the software actually honors the switch.
Anyways, it's about as good a time as ever for congress to get around to passing a Digital Consumers Bill of Rights. The law should be black and white about the type of data that can be gathered and in what circumstances. It's like the old west when dealing with software licensing. It's only wrong if you get caught, and even then there are no really downsides other than negative public opinion.
Oh well.