What alarms me is how important privacy has suddenly become, despite a distinct lack of actualization on the "nightmare" scenarios we keep hearing.
Unfortunately, I don't think that perception is as widespread as it needs to be, despite your alarm.
Did you stockpile food and water for Y2k? Fear of uncertainty and the unknown is both natural and irrational.
Please do not mistake "anticipating risks" for "fear of uncertainty and the unknown." This a risk for which the likelihood currently appears low, but the consequences could be grave and hard to reverse. At least to my mind, that warrants a bit of attention.
You're more likely to be negatively impacted by slipping in your shower, yet I bet you have spent more energy hand wringing over tracking. Just as parents have given overt attention to vaccines causing autism.
Situations which produces large amounts of "externalities" seem to produce this strange scenario where we fight against potential nightmare scenarios. Externalities being defined as something that occurs as a result of the new process outside the expected system. Global warming from burning fossil fuels or secondhand smoke are prime examples although easier to think about because the outcomes are tangible.
This brings up the question, "How do we handle this thing that effects people on a large scale?" It's useful to ask, "What's the worst outcome of this we can imagine" which might be along the lines of 1984. Terrifying because the government is normally the vehicle that is used to regulate large amounts of externalities and data collection could provide it with a large amount of power, something that the government often desires. Perhaps unsurprisingly, the government started to abuse this power very quickly and in secret; although to a lesser extent than 1984. It's limited largely by technology (which is improving at a rapid rate). How we deal with this problem now may help us avoid this dystopian situation once the technology catches up.
On the other hand, we also have to look at what we get in exchange. Burning fossil fuels is so essential that maybe it's worth raising the temperature of the earth until we can develop something better. Or maybe it's just a large exercise in game theory. In the case of data collection we get a few extremely convenient services (search, automation, etc.) in exchange for lack of privacy in nearly all forms and the systems that are abstracted above us (businesses, government, economy, etc.) are shifted towards optimizing for their respective interests using the information they can glean from the collected data. These systems become arguably more efficient more powerful.
These conversations effectively shape how we handle the new thing and are overall good. Privacy (and the effects of privacy) isn't really an easily quantifiable thing, but it does appear to be something that people think is worth having. The end result is most likely to be somewhere in the middle of the road; we can burn fossil fuels, but there are certain standards on the emissions to limit the externalities.
So where exactly is the tradeoff "worth it"? It's different for everybody. For me, I think all my data that is seemingly private for me (I wouldn't let my friends read my email / texts; if it's a file in a password protected account) should be encrypted and impossible for anyone outside of that conversation to access; currently this is not the case. Facebook is a bit of a grey area because people seem to use it as if it was private and the friends feature implies that it is, but the reality is that it is not. All of this falls apart completely when everything we previously assumed was private is clearly not when it comes to organizations such as the NSA which is an organization that provides a very questionable amount of value.
This comment is a good example of how fear, uncertainty, and doubt works. Your entire argument premised on "externalities" could also apply to vaccines causing autism, or a GMO-driven dystopia.
I don't know enough about what a GMO dystopia would be to comment.
I like the fuel / climate change analogy because we know the general outcome (increased temperatures) and a number of likely/possible effects, but it's hard to say exactly how much life will change for the majority of people and there is a very obvious short-term benefit to going along with it. There is current evidence that it is actually a real problem as well. Fossil fuels are the revenue model for many industries, which is also the case with data collection.
While it's a lesser problem, data tracking has similar qualities. We know we lose privacy, but how much and what will the effects of losing that privacy be? There is incentive to use these 'free' services. The NSA, constant data breaches by hacking groups and government trying to strong-arm companies into weakening encryption show that it's a pretty big deal. Lavabit was effectively shut down in a very shady legal manner because it didn't want to provide data on all of it's customers when just one was being targeted.
If privacy really doesn't matter, give me read-only access to your emails. Then tell me when you leave the house each morning and when you arrive home. Machine learning is pretty fun, we can often learn more about you from data you think is meaningless than by reading your emails. Some portion (perhaps most) of the information on you will eventually make it's way outside of wherever it was initially stored. Oh and it's stored forever and you couldn't possibly imagine the uses or incentives on how to use that data in the future because you haven't imagined it yet. Let's have the discussion and decide on some kind of limitations and ethical practices please. Relying on people to be reasonable got us the current NSA.
Also, if you're so afraid of tracking, why don't you live remotely in the wilderness? That's exactly how pointless these types of non-sequitur, hyperbolic questions are.