Look to history for the answer to why privacy is so critical to a functioning, free society.
If you don't care about freedom, then privacy is indeed overrated.
Basically, every law or power given to the government needs to be evaluated as if the most evil entity imaginable were using it. If it is bad in that context, then it is a bad law.
Faulty logic in my opinion: In the past, people used X to do bad thing Y. Therefore, X is bad. Should I not be allowed to have a gun, because someone else shot someone?
It's not having a gun that's bad: it's murder. You can murder in all sorts a way without a gun.
It's not collecting data that's bad: it's violating trust. You can violate trust in all sorts of ways without collecting data.
A better analogy would be that huge pools of data are a temptation to break trust in the way that leaving a huge pile of money lying in the street is a temptation to steal it. That's what those people see in that data, huge piles of money.
The question is should we outlaw things that in and of themselves aren't wrong, but are so tempting that a large minority of people who wouldn't otherwise break the law fall for the temptation and decide to. DUI isn't inherently wrong, but the odds of it resulting in harm are so great that it makes sense to outlaw it. Most of the time DUI is a victim-less crime, that doesn't mean it should be legal unless you mess up and kill someone.
If you don't care about freedom, then privacy is indeed overrated.
Basically, every law or power given to the government needs to be evaluated as if the most evil entity imaginable were using it. If it is bad in that context, then it is a bad law.