@L1ma: Except it *wasn't* encrypted, was it?
The CIQ software is just listening in on the OS' standard event loop—the code that receives all input from the user and parcels it out to the relevant OS functions and any running apps. That latter category happens to include the browser.
I.e. the CIQ code is intercepting user input *before* the browser code has even received it and had a chance to encrypt it. You can write key loggers for *any* OS with a similar event loop. OS X, Gnome and KDE, Windows—you name it.
As the software has been specified and agreed to by the operators themselves, there was no need for the app to request the user's permission as that permission was granted when said users bought the phone and agreed to the operator's own terms and conditions. (Read the small print, folks!)
Apple appear to have been using CIQ primarily as a debugging, performance metrics and instrumenting tool, rather than for the benefit of operators.
I think the wrath hurled at CIQ has been a little over the top: Many hardware engineers and software developers rely heavily on tools like these. They can really come into their own when performing regression testing: if you know a certain sequence can reliably cause a crash, you can write a simple script for the QA team that replays the exact same input sequences. The team runs this script on future OS builds to see if that bug you thought you'd now killed has stayed dead. Over time, you end up with a hell of a lot of such scripts, which your QA team runs in batches against each and every new build.
By all accounts, it does genuinely appear to be disabled in iOS 5.
The fundamental issue here is whether the carriers have been genuinely abusing the software, or whether they're just using it to monitor their network's performance, as is claimed. Whether the users were aware of the application's existence in the first place is utterly irrelevant: they agreed to the operators' T's & C's up-front. The onus is on the end user to read those contract terms and conditions *before* signing on the dotted line.
It may be 2011, but the golden rule of "Caveat Emptor" still applies.
If it turns out that the CIQ software _is_ being misused, a hurricane of rage and fury shall be perfectly justified. But until there is solid evidence of this, it's just the usual uninformed media maelstrom of wild, baseless, speculation and tin-hat paranoia.