In order for the obliteration of privacy to be a good thing, two things (that come readily to mind) must happen:
  1. Laws must be changed so that only those things that genuinely deserve legal penalty are forbidden.
  2. People must cease to judge others for their differences on matters that are genuinely irrelevant.
Number 1 has been addressed quite succinctly by the quote that may be found here. If number 1 does not occur, the destruction of privacy will become simply a tool for governmental control over individuals.
Number 2... number 2 is harder. What is relevant? I don't think number 2 will ever be achieved by everybody to any extent satisfactory to everyone. If number 2 doesn't happen, then the lack of privacy will just mean judgemental moderation of behaviour by the moral majority. But what does it mean anyway? To stop judging people by what they do when nobody's around; if there is no privacy, things like masturbation and striking poses in your new clothes, singing to yourself (when you're someone who can't sing), talking to yourself, all these things will have to happen anyway, if the obliteration of privacy is to be considered in general to be a good thing.

Unfortunately, there's always going to be catty bitches (and yes, I use this term to insult guys as well) who will use the invasion of other people's privacy to hurt them. Two years ago a group of guys stole the diary of a friend of mine and put her through hell by releasing choice tidbits of infomation. They tried to stop me from being interested in her by telling me about how she thought '7 guys had been interested in her in two weeks'. Why care about that sort of thing? It happened in her own space, she genuinely thought that and put it somewhere where she thought she'd never need any evidence or argument. Obviously I lost interest in hanging out with them instead.

Ahem. Point is, unless we can become a gloriously tolerant commune of mutually respecting Ɯbercool people, everyone's gonna need their space to do the crazy things that humans do. Like dance naked to Massive Attack. I do that.