What else do they do with them? Thinking cynically about it, the reason to hold information on your browsing habbits is done to make more money - for Google this money comes from advertising.
Aside from profit, what else is there?
The database is hardly comprehensive anyway, for example:
If you visit a site that I use "remarketing" on then after you have visited you will see my advertisements around the web. I do this because I know you showed interest in the products on that site, you'll see these for a few months unless you purchase (in which case there is no need to advertise at you anymore).
Google gives me the option of only showing the advertisement when you are visiting pages with certain keywords on - but I find that pointless personally.
Is that evil?
I call it targetted remarketing.
