All Your Data are Belong to Us^H^HYOU! – Today Microsoft revised the terms of use for Passport to make it clear that we really aren't trying to steal all of your personal data. Actually, our privacy policy already said that, but our terms-of-use did not match, and this was caught by the incredibly astute Andrew Orlowski. Of course, Microsoft's entire future depends on our stewardship of data being trustworthy, so it's inconceivable that we would be so stupid as to betray that trust, but a watchful press is a good thing. [Better Living Through Software]
This post seems to be Microsoft's take on the controversy.
Sounds like they just don't get it.