I guess with all the toddlers supposedly owning iPods/iPhones/iPads, this has some valid use cases. But actively supporting personal surveillance systems seems like a weird move to me after the media hubbub about the location cache.
Yes, this is something people legitimately want. There are lots of occasions where I will go somewhere with friends/spouse and want to wander but occasionally sync up or know where someone else is. It sure beats SMSing "where R U" messages back and forth.