I couldn't agree more. The end result is that it stifles debate, criticism and dissent and undermines any hope of democracy and social justice. History shows that governments cannot be trusted and all it takes is the next McCarthy to justify spying on the (insert your fear here) in our midst for things to go horribly wrong.
I'd argue that several approaches are required.
1) Encryption of personal data,
2) Far greater transparency and accountability
3) The dismantling of the overreaching and intrusive systems now in use.
4) Governments committed to the protection of personal privacy and freedom and the economic well-being of all peoples rather than a select few regardless of culture/religion/genes/race/sex/colour/location.