I think that's what the authors meant by it. In the sense that your information should show up in your google search results, similarly to how GDS works. It's of course unfeasible, and probably illegal, to make that information available to the world at large. But if you have access to password protected content, there is no reason for it not to be visible to you when you google for it.
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"But what if Google could convince users of the value of indexing web app data without identifying the individual user..."
I'm not sure what they're trying to say, but they don't seem to be talking about indexing your own private data for you.
How can password-protected data not be user-specific? If the web application writers want to make certain data public, they already do this - for example, my Facebook profile is indexed by Google, but the messages I see when I log in aren't.