Your points are well-taken, but in a democracy it's a hard argument to make to say: "people don't really think what they think they think because of the media."
> So how do we get people to place a higher value on, say, their liberties and human rights instead of fear of the spectre of terrorism? Is it possible?
I think people do care about their liberties and human rights, but they do so in concrete ways. I think you can get people to care by making it more concrete for people.
People on HN take it for granted that your average voter should be outraged by the FBI being able to look at someone's Facebook posts. But why? To my mom, Facebook is just one of those things that wrong with kids today--posting half-naked pictures of themselves for everyone on the internet to see. You're not going to get instinctual outrage from her on the issue.
With her, you might get some traction on the front that the government might use it to single out people from certain backgrounds. After all, she worries the government holds up her checks because she's got a middle eastern last name. Other others you might get traction on the front the government could use it to single out particular religious beliefs, immigrant communities, etc. Painting with broad brushes, there are ways to take the privacy argument and put it into terms that target Jews, Muslims, Blacks, Hispanics, Mormons, Baptists, etc. But right now it seems like the arguments are couched in the language of young libertarian white techie humanists, and that's just not a major voting demographic...