Can they not?????
No, they cannot. Or at least, with GPS turned off, the tablet thinks I'm somewhere.. err.. in the street. Maybe. Or in the fields nearby. Or by the local Tesco. Perhaps. When that huge blue circle calms down a bit and finds a fix a little more accurate than "err, somewhere between Liverpool and Manchester".
In cities and other hugely built-up and wirelessly connected areas it's a little more accurate. It actually pinpointed me as being in the correct university building down to about 10m, though the fact there's a honking great phone mast outside and the entire campus is saturated in 2.4 and 5ghz access points probably helped. Anywhere else, wifi and cell-tower-only location is about as accurate as trying to hit the bullseye using a dart made out of jelly, sellotaped to an RPG, from half a mile away.
As I said though, even if the thing does know that a router is in your house, what privacy issue is there? It's not like you can't randomise the MAC address by nagivating to 192.168.x.1 and logging in to change it periodically, if you're concerned. Or maybe just not broadcasting to everyone in range that you have a router. As someone mentioned above, this is a little like keying up your CB and shouting "My Network Name Is FooNet" into channel 19 over and over. If it's government intrusion you're worried about, you'd best cut the cable leading into your house right now because I can guarantee that the various investigative services have far better ways of finding out what porn you're into. Usually by sticking a tap on the ISP end.
Maybe I should change my tablet's portable AP SSID to "AbusingThirtyTwoCharactersLimits"?