Nope, you're wrong. Google will always be in a situation where they can read your password. Otherwise authentication to the rest of their services would be impossible.
Again, it's sad if you think they're actually logging everyone's plaintext credentials. Which is besides the point, because in the latest versions the additional non-Google account passphrase extends to all the encrypted data it syncs.
I seriously doubt Google is dumb enough to store user passwords in plaintext. There is absolutely no reason to. Passwords get stored as non-reversible hashes.
>I seriously doubt Google is dumb enough to store user passwords in plaintext...
And who said they'd need to store anything? The only need access to them once in order to defeat any kind of local encryption scheme based on your Google account password.
