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This is quite cool, but doesn't address the fact that Google is still a centralized repository of search history. While moving to HTTPS does most definitely eliminate some major problems, it does nothing to fix one of the biggest structural weaknesses to search.
Exactly. That's why I think they should create a "private searching" mode that doesn't log anything, similarly to what browsers do in "private mode". Of course you'd still have to trust Google, but once they say they will do it and put it in writing, you just need one person to find out that they aren't really doing it to ruin a lot of trust, so they would have an incentive to do it (and it would probably be hard to keep it a secret eternally if they pretend to do it but actually don't -- ex-Googlers would leak it eventually).
They will never do this because of a couple reasons:

1) Ads. They need to be able to log your hits so they can charge advertisers money.

2) Security. Not logging visits means they wouldn't be able to trace back suspicious activity, etc. If you somehow managed to hack them through their private web search page, there wouldn't be any traces of you.

There aren't many good reasons for this anyway. It wouldn't make your searches anonymous to anyone but Google. Your ISP would still have a complete record of everything you've done. And since Google doesn't really see themselves as someone you need to be protected from, what is the point?

If connecting over SSL your ISP would not have a complete record of everything you've done, that's the very point of https.
Recording hits on AdSense or sponsored ads doesn't require logging the search. Even if it did, don't log the searches where I don't click an ad.

They would gain more users than they would lose revenue by implementing an easy to use and east-to-switch-to private mode. You know, for when I'm searching for horse porn, or whatever it is that I care if Google knows I'm looking at.

Also here: http://news.ycombinator.com/item?id=1348871