A recent study conducted by Microsoft in a number of countries reveals sentiment about location services and privacy. It is not surprising that 84% of the 1500 people surveyed stated that they were concerned about location sharing without their consent and that 52% expressed concern with sharing their location with other people and organisations.
Read more about Microsoft's survey here.
Compare Microsoft's findings that 51% report having used a LBS in the United States with Pew Research Center's 7% of online US adults use of location-based services regularly.
It all has to do with what you define as constituting LBS (e.g. the use of a in-vehicle GPS for navigation versus a find the nearest petrol station get request on your smart phone).
A brief critique available here by Gigaom.