Some people want to be more private than current (for example, this discussion of email keys). As more things move online, it is worth thinking where the balance should be (we probably agree on that), I think the balance should be less privacy (I'm sure you don't agree with that, a full discussion on that won't fit well in a ycombinator thread).
You’re right on you final points. My two rebuttals for advocating for less privacy online is that being online naturally makes you less private, not more.
Previously if someone, government or otherwise, wanted to learn about you, they would need to physically follow you, tap your phones, intercept your post etc. Warrants for searches were built around this.
Online, you can dig into the private life of someone on the other side of the plant who you’ve never met. With the application of computers you can dig into the lives of hundreds of people you’ve never met. All without leaving the comfort of your desk.
The opportunity for fishing expedition is unprecedented at the moment, and it always easy to justify a fishing expedition if you pick a horrific enough crime (child pornography seems to be the favourite right now).
Finally privacy is the strongest bulwark we have against government overreach. That doesn’t mean some top down conspiracy of a totalitarian-elect government. It can be normal everyday government administrators who decide to step outside their bounds for personal reasons, or belief of moral superiority.
Simply put, there’s no better deterrent for bad behaviour than hard work. Privacy makes bad actors work hard for their lunch. It makes the good actors work hard as well, but the solution to that isn’t less privacy, it’s more funding and resources for good actors.
Why would we want to give up more?