Yeah. Next Amazon will remember your previous purchases in order to offer you relevant suggestions for what you might like! Then where would we all be?
Well I am happy advertising will be more targeted and relevant, both as a consumer and an occasional advertiser. A transaction implies agreement on both sides, anything which facilitates it is good. Advertisment by itself will never put a hand in your pocket.
As for tracking every move... They're already doing it for some time. This way indeed it will be easier to get to the information - a spouse of a friend may find your Interests page ... interesting. But considering the world now, and most likely the world of the future is filled with social networks whose primary job is to advertise your interests to everybody, I don't think most people will have a problem with this. Especially the young. As for those who do... you can always opt out.
Google's strength is ads that you (likely) want to see, instead of flashing banners, stealing your attention. Ads are presently targeted by your google search, and by your gmail content.
I'm sure someone somewhere will be naively missing the point, happy that the advertising will more targeted and relevant.