First and foremost, we’re talking about a locally stored file that never gets sent anywhere. It’s on your iPhone, and it’s on the computer you use to backup the iPhone. That’s it. Apple isn’t “tracking” you. Your phone is tracking you and keeping that information from anyone, including you, unless you get into this file.
If you encrypt your iPhone backups—and you should (it’s just a checkbox in iTunes to make it happen, and it has all sorts of benefits)—even someone with access to your computer can’t get to this information.
Your iPhone stores all sorts of other information, like a log of all your phone calls, how long the phone has been active, how many times it was rebooted, etc. Location data is hardly the only scary thing getting recorded on your phone. (You do know that your carrier is storing most of this log data and actually PRINTS IT OUT ON YOUR BILL and mails it to you, right? It’s not like it wouldn’t be easier to steal someone’s mail than to steal their phone or hack into their computer.)
ANY CELL PHONE and especially any device with GPS capability is capable of being tapped by your government for spying purposes. They don’t need this file to know where you’ve been.
All of this leads me to the obvious question: What’s the big deal? Computers log information. That’s what they do. Every keystroke, every mouse click, every tap—if you’re a software developer, you know that you have to log all of that stuff to be able to uncover bugs and figure out why things go wrong when they go wrong. The only concern comes when a company takes that logged information and attempts to profit from it in some clandestine way. Apple is ABSOLUTELY NOT doing this with your location information.
There’s nothing to see here, people. This is not a story. It’s kind of cool to look at the data, for fun, but you can save the tinfoil hats for another day.