The ICO is right to resume this
The ICO detected an interesting difference between what they were told, and what Google has formally stated elsewhere. For those with a minimal command of the English language I'll translate that: they lied, and were stupid enough to prove that by means of statements elsewhere. Thus, the ICO correctly calls them on it.
Secondly, the German defence ("Ich habe es nicht gewusst" - I didn't know) hasn't worked since WW II, in Google's case you'd end up with having to believe that their software release model is so bad that they failed to detect code that was AND in the vehicles AND in the back end to store that data. Not a chance in hell.
Thirdly, it is immaterial what you think to be private or not. You can argue until the cows come home, but the ICO and the law define that, and in their eyes it is private information, so Google was flagrantly in breach. Not that that is a surprise, the US model seems to be to break the law and trying to get away with it instead of paying any attention to it. Worked well for Wall Street too, that's why the global economy is in such a mess, but I digress.
Instead, let me adjust your insight a bit. The good folks here generally have a degree of technical competence, but a lot of people at home do not. This means that quite a few of those WiFi access points are still left at their default settings and passwords, much like VCRs used to blink 12:00 in many homes. Those people are as much entitled to their privacy as you are, and this is why the law considers this data private. The law is to protect a basic human right, for all of us.
I have no idea how it will pan out, but I hope Google gets a fine that actually *hurts*. It's time they realise that laws exist to be complied with, not to be creatively avoided like tax payments..