Not only that, but they feel the need to do it remotely because the data would grow large over time and the extra processing would bog down devices if it were all done locally. Perhaps even more importantly, analyzing the data on centralized servers helps them improve the software they'll ship in the future rather than simply improving the experience on individual machines.

I just installed Windows 10. When it asked if I wanted to adjust my privacy settings or trust the defaults, giant air siren started blaring in my head.

Sure enough, I had to disable most of it. I left the ad targeting on, because only thing worse than targeted advertising is untargeted advertising.

You're opt'ed-in by default because Microsoft is a business and they need to make money. If they made it all optional then hardly anyone would turn those features on.

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Its something you should care about. I care about the privacy issues here the same way I care about the potential dangers of self-driving cars, or even current generation aircraft. Yes, there is a risk involved, but the existence of the technology can vastly improve the life of its users, and we should be doing what we can to contain the risk, not stifle the technological innovations. I, personally, can't wait for the first self-driving cars, even though I know without a shadow of a doubt there will be a major catastrophe within a decade or two of them hitting the streets in numbers. The proper way to proceed is to take these concerns and watch for when they slip up, when the mistakes are made, and at that point deal with them both through personal preferences (stop using Windows) and through legal means.