Agreed. Catering to the "Just Works"/ease-of-use-über-alles crowd by relying on integration with 3rd party services is just asking for privacy troubles.
By acting as a proxy for the searches, Canonical creates another potential point of compromise in the information chain, increasing the attack surface, in the parlance of our times. Shuttleworth's argument that using Ubuntu is tacit consent on the part of the user to trust Canonical to not abuse or backdoor their software packages ignores that users are unable to audit this proxy infrastructure, whereas auditing the behavior of locally running software is actually doable. Even if Canonical is trustworthy, funneling user data into a central location creates nontrivial risk, and is of questionable design. (That isn't to say it doens't have advantages, obviously Canonical can smooth over 3rd party search API version-churn on the back-end this way, but is it worth it?)
Ubuntu is, was, and will always be, a consumer-grade distribution, and everything that implies.