Can we the user, disable this feature or at least customize it so that we control what is automatically uploaded or backed-up in the icloud?
Yes and yes.
To disable go to Settings > iCloud > Storage & Backup > iCloud Backup OFF.
But it may be easier to control what gets backed up. Under "Storage & Backup," go to Manage Storage, select your iPad. You will then see a "Backup Options" header in which you can turn off Camera Roll and anything else you don't want backed up.
...but with icloud automatically doing backups, doesnt that compromise our privacy?
No, think of it like a storage room. The only one who can see the contents is you, the keyholder.