I see a few issues with such massive violations of privacy:
1. Slippery slope: Knowledge of people's private lives is extremely valuable, and nobody with the power to collect or use it is going to relinquish it, if anything they're more likely to try to get more, until they have absolutely everything. This isn't inherently bad, as concentrated power is very easily abused. We have a wonderful case study of this with the NSA, their ever expanding powers, their willful breaking what few legal limits are imposed upon them, and their inability to prevent themselves from breaking their own policies about abusing access to their treasure trove.
2. Benevolent dictator: This privacy invasion will most certainly work it's way back to the government, which has severe implications for civil disobedience and political dissent in general. While it's all peaches when the government is "nice", you're never going to have all citizens agree with the government, and future politicians abusing previously allocated power/resources is extremely likely (not that there has ever been a government administration worthy of invading everyone's privacy to begin with).
3. Drawing a line here is not only a great place, it also lets everyone consolidate resources to fight for a known good state. There's a lot of information to be gleaned from the data, and it's unlikely that everyone can commit fully to understanding the ramifications of letting this information out, much less understand how it will be used, or how it can be used. And much like giving the legislation a pile of money with legislatively imposed spending limitations, they're going to be constantly fighting to tweak and remove those limits. And its so much harder to be constantly vigilant when there's dozens of laws governing what can or cannot be done with the data, before we even presume that we agree with those laws to begin with.
4. As noted above with the NSA, it's not possible to trust custodians of this treasure, they're only human, and they're bound to abuse their power at some point. But we don't just have to worry about people with legitimate access obtaining this data, we also have to worry about hackers grabbing it from poorly secured servers, which seems to be an inevitable computer event, even more so for such massively useful information.