This is simply the result on non-technical people panicking that the sky is falling when they really have no clue how this technology works.
I copied the file in question offy iPhone and used SQL lite to see exactly what was in it. There are two main tables. CellLocation and WifiLocation. The data in these tables are NOT used by apple to track you but simply assist the GPS device optain a very fast lock. CellLocation has the location of all nearby cell towers and their "id"s. These cell tower entries have an estimated accuracy between 4.5 to 5 km. If a wifi lookup fails during a gps lock, the system default to cell location if the cell radio is switched on.
The WifiLocation table had many more entries. These entries contain locations and MAC addresses of Wifi base stations and a time stamp of when the wifi router was last detected, and their location. How does this all fit together?
The user loads google maps and activates location services. The system will ask the wifi device for all nearby wifi MAC addresses. This list is queried against the list of known WifiLocation entries. If one is found, the system reports a GPS lock. If not, the system will query the CellLocation table. If the cell tower location is found, the system reports a GPS lock, albeit over a much larger area.
If those two methods fail, the system will just sit and wait until manual GPS lock can be achieved.
So in simple terms, it's a CACHE! (hence why the file is in a folder called cache...). This technology simply allows the iPhone to get an extremely fast GPS lock.
Panic over nothing, that's all this is.