Outside of privacy issues, the problem with this root level key logging software is that, although the chances are that carrierIQ might never intends to take advantage of any personal or secure info (like logins and passwords) that is transmitted, unscrupulous crminals can simply hack the paths and/or points to which the data is sent instead of having to directly hack your phone. Why bother hacking the phone since a "legit" company has already provided that part for the bad guys. As was shown in the video, supposedly "secure" https information was logged before it was even encrypted.
All the bad guys need to do is find a way to intercept the data points or data aggregation for the entire wealth of logins to banks, etc, and a bajillion or nice things like blackmailable texts, numbers called, etc, etc. Basically everything you do through your phone since it's logging everything for nefarious reasons (rather than simple dumb corporate advertising/sales reasons).
If I was a nefarious hacker, I would be giggling with joy at a new single source of getting all that info, rather than having to trick you or hack your phone. And the worst part is that you'd never know it or even have a chance to prevent it since the majority of customers are clueless that their phones is logging every damn thing they do and sending it to a third party..
