The article is a huge amount of FUD and scaremongering, but even if you take the basic info outlined in it then there is only a small worry and it is very easy to protect yourself.
- if you have your android device set to backup online then yes, it will back up known wifi passwords. This is the same as iPads and other devices that give this cloud backup option.
- assume most people do these online backups- so there is a lot of this sort of data stored. The connection the article makes is that Google knows these passwords. This is not really true. It's like saying that Google knows all your data. It may store it, but that is very different to knowing it.
- potentially, if this data is stored in the clear and Google is hacked then it could be a worry, but to be honest, there are far better ways to attack me than access my WiFi.
Solutions:
- Use SSL or other encryption when using 3rd party networks, even on encrypted networks. This should be default behaviour anyway.
- Turn off online backup on any device that uses your WiFi
And of course - as Joshua says: If you have something you don't want anyone else to see, never share it with anyone (this includes never putting it on someone else's servers)