Our president committed crimes his justice department jails people for (illegal drugs). Drug testing is a perfect example of the surveillance state. The people who don't get tested? The testers. The legislators. The people in charge. I know there are technical problems with that analogy - but you get the point.
It doesn't matter if the person is known to the general public or not. Money/power/influence is what matters in our present world.
This 5 years the article talk about. Do anyone really believe than in 5 years, they won't extend it further? It will continue to the point in which either everything is stored forever, or push back actually takes away this pandora box from the government.
No goverment ever want to be with less information about the population. If they could predict who is a criminal before a crime is committed, social benefits could be rerouted away. If they could predict who is going to become political candidates, they could adjust information flows away or towards that person. If they can predict who is voting for who, they can direct support/anti-support to "encourage" the right result.
This is why I am worried about a surveillance state. With a large enough database of population information, and prediction models, democracy will be eroded to the point of destruction.
Surveillance is no replacement for legwork. They're not catching that many criminals (or "terrorists") with it right now, and in order to have an effect like you describe they need to catch most if not all of them. Surveillance isn't a panacea like that (even if you ignore the freedom aspect), even with perfect total information awareness, there's a ceiling of efficiency.
The thing you describe, to run smoothly is just about the same amount of trouble and effort for a government, as it would be to rule with actual justice, civil liberties, privacy, etc.
The truth is, all this surveillance shit is NOT really about protecting the public and reducing crime. It may be useful but not that useful, definitely not billons-of-dollars useful, the amounts that are being invested in this tech. It's about the state protecting its place, keeping the status quo and people covering their asses. In a healthy country, those two goals are aligned. In many countries, including the USA, they aren't. Also, money and power. Actually it's just power, money is secondary.
Whether it was a gainful use of resources given the origin of the tip is dubious, but they weren't actually violating the judicial oversight requirement, as far as I understand it.
Unknown individuals should be assumed to have privacy rights. You can't break into someone random person's house, then find out that they committed a crime, and say that the warrant-less search was now a-ok.