When we all lived within spitting distance of our families in a single common room, and everyone in town knew you from birth to death, how much different was life then from now?
Will the 'erosion' of privacy really just return us to a state that we (humanity) have previously been in?
The way we're heading, we'll have neither personal trust nor privacy. It's not JUST the lack of privacy that's a problem, it's the fact that any stranger can know everything there is to know about you. In a small community, everybody has to have good working relationships with everybody else or the community dies. On the internet, not everybody has your best interests in mind.
Star wars kid could probably cure cancer, but he'd still be "the star wars kid" to most people.
I see a policeman on TV, he's a 'cop'. Sure he may be a father, avid sci-fi junkie, and so on, but all I see is one dimension.
If Star Wars Kid cured cancer, we wouldn't forget about his light saber antics but we'd add that to our impression of him----now he's a nobel winning scientist, with an impressive intellect, who has saved potentially billions of lives..... oh and in his youth he used to geek out on Youtube.
The policeman example is interesting, what happens in a society where a policeman is trying to be taken seriously and discourage you from some activity you are doing but your glasses automatically recognise his face and say "hey, I see you are being harassed by the police, these naked pictures leaked by his ex-wife might be of use to you".
What you are looking at in the future is the possibility of having people all over the world who don't really know you at all making judgements about you based on incomplete (even if still comprehensive) and possibly out of context information.
For example "cyber bullying" where what would once be bullying from perhaps a small group of people at a school can be escalated into cases of kids having thousands of hateful messages from people who they have never met posted on their facebook wall or their pictures turned into memes or whatever. For example the "star wars kid".
For example: Imagine going for a job interview in another country and having the interviewer say "you're that idiot who did X" because that is basically how you are known to the world despite your meaningful work in some unrelated area.
For example, I think in small towns the pariahs and those dubbed 'weird' have a harder time getting rid of their reputation and there was always far more pressure to conform than there is today.
When you become well known in a small town for some particular thing which may give you a bad reputation you have the option to move away or wait for time to fade that reputation somewhat. On the internet there will be hard evidence in existence for perpetuity.
Edit: And besides, in small knit societies the lack of privacy is reciprocal. It's not the same thing as having a small group of people who control massive data centers and have the capability to pick up on some dirt on anyone within hours of requesting it.
There's too much pressure from both sides. Companies, governments, etc, all want to know, and lots of people want to share.
I think the future will be one of (social, at least) privacy through getting lost in the huge sea of people instead of privacy through actual anonymity.
Whilst it is likely that you will get "lost in a sea of people" for the most part, it's also quite likely that you will "stick out" in one way or another and this might not be in a way you like or even in a way that is necessarily fair.