Just because it is easy for you to imagine such a scenario doesn't mean that it is likely.
Just because it is easy for you to imagine such a scenario doesn't mean that it is likely.
If the "horrifying...total surveillance" remark put you off, that was not at all meant to imply "ubiquitous networking must be bad because of this story, so let's prohibit it!".
In fact, in the story the smart dust, via the backdoor, provides the ability for the hero to break the (very, very nasty) oppressive regime.
For a more near future example Vinge presents the network in Rainbows End, especially given the work that's been done with Wifi meshes. Granted, I haven't heard any news about the idea lately, but as I recall, Google has one in Mountain View delivering free wifi to everyone in the area.
I believe this part (or something very much like it) is actually already feasible today).