Companies should be held accountable for the data they collect and how it is used. Most TOS are unconscionable. I'm sure some of the folks here read the entire TOS of every web service they use, but I've never met a person in real life who does. I think a framework for TOS that is basically just a check box "Do you collect: A, B, C" "Do you distribute: X, Y, Z" could be really useful. There could be some pretty cool strategies between web sites and browsers to help users determine what the site is doing and whether they want to proceed.
This is a time for a dialogue that builds a working framework, not a burst of legislation that pacifies the public and accomplishes at best a couple of short term goals.