An attacker can sniff wifi traffic outside your house (without connecting to your network) and then decrypt it all, passively eavesdropping on your private network. Google says that theyll delete this data when you stop backing it up with them. Update: I have filed a feature request in Androids bug tracker to offer encrypted backups, similar to the password sync options offered by Chrome and Firefox. The backup/restore feature is part of the proprietary Google apps for Android, not the open source Android project.”]
Source: https://micahflee.com/2013/07/use-android-youre-probably-giving-google-all-your-wifi-passwords/