The counterargument (authoritarian) is that police spies are necessary to combat various forms of crime in which all parties to the criminal activity have no interest in reporting said criminal activity - for example, illegal drug transactions. The counter-counterargument (libertarian) is that such forms of crime are actually victimless and the solution is to legalize and regulate all such drug transactions, to move them into the same sphere as alcohol sales.
It would be a very curious world, however, in which anyone could point their phone at anyone else and get an immediate background report on them (which is apparently what the government agencies like the FBI want to be able to do), including their home address, phone number, credit history, educational background, criminal records if any, online browsing habits, family and business relationships, medical history, travel patterns... that would be a very creepy world indeed. It already seems to exist for the secret police, however, with tools like Palantir coupled to this facial recognition system. The potential for gross abuse is pretty obvious.
Government regulation banning all such facial recognition software and data collection and aggregation is the only realistic option if we want to prevent such a dystopian future. People should have a right to privacy, even if this destroys the business model of Google, Facebook, and other personal data-based targeted advertising platforms, and so what if it makes the job of law enforcement harder? Read the Bill of Rights, about half of it is all about making it harder for law enforcement to snoop on citizens.