Doesn't this mean that you could monitor my searches, though?
With the release of Googlesharing 0.20, even the Googlesharing proxy is not capable of monitoring your search queries. The addon pre-fetches the identity information from the Googlesharing proxy, uses that to construct an anonymized request, and then routes an encrypted connection to Google through the Googlesharing proxy. So while the traffic is routed through Googlesharing, it is encrypted to Google and thus not visible to the Googlesharing proxy.
The result is that Google knows what is being searched for, but doesn't know who issued the request. The Googlesharing proxy can tell where requests are coming from, but can't tell anything about the content of the request. The only thing you have to trust is that the operator of the Googlesharing proxy is not actively colluding with Google in order to determine the identities of Googlesharing users.
If you're still worried, remember that the Googlesharing addon and proxy code is publicly available. So it's possible for you to run a Googlesharing proxy yourself, or to find someone who you do trust.