The only built in backup (and sync) option on android devices is to Google servers. I imagine most (dumb) android users have it turned on.
Android is an open source system and its backup manager supports plug in backup transports. Vendors can implement their own transport and backends if they wish.
Same can be done by third party app. Do It Tommorow for example syncs its todo list to its own servers.
How hard would it be to encrypt that information locally before giving it to Google to store? Not hard at all, even optionally for people who can't be arsed to enter a password once when the want to restore or sync on a different device.
You can turn the remote backup off all together (Settings | Backup) and do your own off line backup/restore (search google for 'adb backup').
The only possible reason I can see for not providing an encryption option is that Google want to be able to read all that information which means they probably do and of course so can the NSA when it wants to.
That's a guilty-until-proven-innocent speculation.
The bottom line is that Android provides tons of options. Don't like the Google apps and market, you can use F-Droid GetJar and the likes. Don't like the Google home launcher, use a third party launcher. I used for years a rooted phones with open source ROMs, Titanium Backup, ROM Manager, and the whole shebang. This days I don't 'dick' (an Aussie expression?) with it as much much, I found happiness with the stock Nexus software and a few options turned off.