For understanding how strong data should be secured on an Android device I want to understand which attacks are possible. I started to write down my knowledge and hope that I get corrections, where I'm wrong or where I'm missing something. I first assume that Google don't be evil, so will ignores attacks from google themselves.
Each application is signed and runs under his own user-id, so an app can only reads data which belongs to him, except the app creates a public storage. Furthermore app which are sign with the same key can share data. If an application want to get special rights like reading or writing to calendar or contacts the user must accept it.
So by default it's a secure design. Unfortunately every system can have security issues, so that the system become corrupted. On Desktop-Systems regular updates are common practice. On the android it depends on the vendor and is except the Nexus mostly bad. So it could be that there are security holes open for a long period.
So how could an android phone be attacked?
Google can delete and install apps silently (Link). If someone hacks this mechanism, an attacker can install arbitrary apps on a device. Unsure if this app has automatically all rights it wants to have. This doesn't happens till now, but it's possible. You can only protect your phone by checking regularly all installed apps and there rights. This mechanism can be misused by a hacker.
Malicious applications can do a lot evil things, but if you don't give every app the rights the apps wanted and think a little bit, you can protect your phone.
Some security holes in the browser or the system allows an app to get root-access. In this case the app can do everything it wanted. I don't know any protection against this. As far as I know android has such security holes, so this is the most dangerous issue.
So in summary the only secure protection of data seems to be encryption. Depending on how secure your data must be with a default key or an individual key (in other words a password).