Doing something because others do it is not an argument.
There is a big difference between anyone with access to your phone to also have access to location information and some company who you make business with have access to information you had to share with them.
An application you download from the internet should not *EVER* have access to this information, unless enough BIG RED BUTTONS have been clicked and the phone is on a special mode only hackers know.
There should be a way to easily clear this cache, like the "recent files" list on a desktop. It's important private information and needs to be handled like that.
The "we are all in a big brother world" argument is ridiculous. There are (at least) some of us who don't have a facebook account, or even a blog, because they don't buy into the "world is a stage" and "everyone want's their 15 minutes of fame" philosophy.
Yeah, I know just by commenting on a public forum I'm giving away some of my private life into the internet, but there is a line for everyone.