PRIVACY and INDIVIDUALISM are inseparable concepts, in many aspects synonyms to each other. You can not chip away from one without hurting the other. Since individualism is a major force behind cultural and scientific advancement, a step back in privacy is a step back for society. A society morally governed by GUILT is better than one governed by SHAME and GROUP-THINK.
There is much more to privacy, than your naked body. Yet arguments pro and con (even by the likes of David Cameron) usually degrade into shallow debates of the "I've got nothing to hide" versus "so why do you have curtains?", and "neither do I, but I don’t have anything I feel like showing you, either" type.
DEFINITION OF PRIVACY (attempt):
While privacy should certainly be viewed as a pluralistic concept, one view I found very appealing defines privacy as our right to keep a domain around us, which includes all those things that are part of us, such as our body, home, property, thoughts, feelings, secrets and identity. The right to privacy gives us the ability to choose which parts in this domain can be accessed by others, and to control the extent, manner and timing of the use of those parts we choose to disclose.
DEFINITION OF AN INDIVIDUAL:
The notion of an individual as an "indivisible" person, is not entirely universal either. Once a person is decomposed into a set of "building blocks", e.g. a person's thoughts, body parts, physical (hair style, tattoo), or behavioral (speech) expressions, different societies are unable to agree on which of these blocks to include in, or exclude from the set defining the Individual.
However, within a single society/culture, most of these blocks will certainly be the same as those within the domains defined by privacy.
EVOLUTION AND THE VALUE OF INDIVIDUALISM / PRIVACY:
Strengthening individualism is the result of thousands of years of cultural and religious development in western cultures. Many examples attest to this development, e.g. the reformation period at the turn of the 16C (thank you Erasmus, Luther) that resulted in "unsocial Protestants" having each what we might today call their own/individual "hotline" to God.
Individualism advocates moral guidance that stems internally from GUILT. This is in stark contrast to external moral guidance caused by SHAME, typical in eastern cultures, where people consider their actions acceptable when their peers consider them acceptable, resulting in GROUP-THINK.
In this sense, individualism/privacy is intimately tied to human potential: it allows the individual to stop and question his own actions/behavior, as well as actions/behavior of others, continuously re-evaluating society's current state of affairs, thus improving and advancing it in the process.
FOR US TO DECIDE:
Are we willing to give away thousands of years of western cultural development for a bit of (promised) security?