I agree, the res is already pretty bad and I'm not really interested in the people in the photos but rather in the actual area the photo is of.
On August 18th, Google released Street View imagery of Switzerland. A few days later, Switzerland's Federal Data Protection and Information Commissioner complained. Now, it looks like the two sides have reached an agreement that will have some rather far-reaching effects.
To start, Google's going to do a more thorough job of blurring the license plates visible in its photos of Switzerland. It's also due to take another shot at blurring Swiss citizens' faces. This should satisfy Commissioner Hanspeter Thür, since he and Peter Fleischer, Google's Global Privacy Counsel, met to discuss the situation.
Then here's a key point: Google's going to revisit older Street View images and make the faces in them less distinct, too. So the next time you research a route to any spot, whether it's in the Alps or the middle of America, what you see may be markedly different.
This could cause Street View to be a bit less interesting, but it could also make a lot of objections to the program disappear. That would be quite important, since Google must be tired of running into fresh complaints every time it releases new photos, and software tweaks tend to cost less than lawsuits.
The changes should start becoming visible over the next month or so.
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The pictures won't be less
The pictures won't be less interesting because faces are blurrier; they would only be less interesting if the entire picture is fuzzier. Please, Google. Do. Not. Lower. The. Photo. Resolution. Most of the U.S. imagery is pure cr*p because of low res photos. When most of us use Street View it's to get an idea of what a certain area looks like. Most of us aren't actually interested in the people in the photos, so it's okay if Google gives people the total anonymity treatment. But if they lower the res of the photos, Street View becomes nearly useless. Travel any street in L.A. Street View, and you can barely read large signs.