I see privacy as "no one else knowing" and I value it quite a bit. It is honestly necessary for my happiness.
I think what happens when we cede private space to the public (think social media) we trade a higher degree of freedom for a lower one. People are generally willing to be honest in private space, whereas they're not so willing in public space. For obvious reasons. Who'd want to say something offensive to a thousand people? Very few have the energy to cope with that and continue their lives in a healthy manner. Anyway, this thinking extends very deeply into the mind. It can go as far as people being unwilling to be entirely honest with themselves in public space. And much further - to complete conformity.
Also, I think the transition of vast chunks of life moving into public space is what feeds things such as "political correctness," which in my mind is a form of harmonization. A very unhealthy kind of harmonization though. It's a collective attempt to make everyone's mentality and morality uniform through asserting concrete "rights" and "wrongs". A lot of these "rights" and "wrongs" would normally occupy a gray area, but through strong enough assertions they seem concrete. And, of course, if you're "wrong" be prepared to face rather extreme consequences. It's sort of like a religion in this regard. Harmony is good, but only the natural kind. Forced harmony is an obvious contradiction.
Private space is essential for civilization and the less private space we have the more barbaric and uniform society will be. Healthy divergence, uniqueness and so on are things that traditionally only occur with high degrees of isolation and privacy. Consider a writer writing a book. It's considered normal for a writer to completely remove himself/herself from society in order to free their mind from emotional and intellectual constraints. And with these constraints almost always active, divergence and uniqueness are greatly diminished and might one day be extraordinarily rare. If the trends continue well into the future, anyway.
Another example would be the many unique cultures that existed during ancient times. Isolation was required for that uniqueness. Exposure to a "dominant" culture creates uniformity through conformity - forced or voluntary. This is currently happening with Western culture. And things such as globalization and the popularity of Hollywood help facilitate this process. One day, I imagine, the entire world will be painted the same color and by the same brush. A nightmare. And the incremental reduction of individual privacy plays a role in this.
Honestly, I have completely removed myself from mainstream social media and I simply ignore the vast majority of mass media. I'm much happier and more able to function normally.
As for governments and corporations spying on people through the internet, that's obviously appalling behavior. I completely disagree with it. The purpose for it doesn't matter. It's clearly not justifiable.
I hope I wasn't too off-topic.