No, I think he's right, up to a point. For all their flaws, Americans seem to have a basic attitude that the government is not your friend, nor should it be. The whole country was founded on the premise that the government is powerhungry and corrupt by its very nature, and that strict controls must be in place at all times to prevent them from going crazy. Now I obviously can't vouch for a half a billion Europeans, but there seems to be a general feeling that the government exists to make life better, and that it is much more capable of handling problems than mere mortals. Once the role of the government shifts from preventing bad things to promoting good things, a subtle yet important distinction, everything they do can be passed of as "for your own good".
Sadly, the general trend I see has nothing to do with the UK or with Blair, but rather is global and progresses linearly. As technology progresses, our ability to monitor people and rob them of their privacy in a thousand little ways also grows. And slowly, I forsee all governments moving in the direction of less privacy, under many justifications and specific cirumstances, but all in the same direction nevertheless. If we posses the ability, chances are that sooner or later all governments will make use of that ability, regardless of the specifc nation or government in power. And that is the most dangerous thing of all. The unseen, creeping kind of control, the one that arrives with decades, not months or years, and simple becomes part of everyday life.
I mean, how does this law differ seriously in spirit from the 3 million CCTV cameras monitoring London at all times, capturing each Londoner on film 300 times a day? It doesn't.
Well, this european trust of governments is basically a watered down version the whole divine right of kings, which itself was inherited from the orientalized late Roman monarchy (Aurelian, Diocletian), which took its form from the many eastern kingdoms that Rome conquered as a republic, which took their form from ancient egypt and sumeria. If you're in the mood for blaming someone, blame Diocletian. He's the one who introduced this plague into the western world (heh, being an american I guess I fit your description very well).
And while you're absolutely right about the technology thing, I wouldn't say that the changes are too small to be perceptible taken one at a time. From personal experience, they are actually quite noticable, but they're always just below the threshhold where the silent majority (or more likely, any vocal minority of sufficient strength) is willing to stick they're necks out to do something about it.
And we westerners are so comfortable and confident in the success of our democratic systems that even if we were less lackadasical in protecting them, most of us still don't grasp the massive changes that technology introduces. Which is why I place my hope in the third world democracies, ether in Latin America (if Chavez really does start quashing dissent on a large scale, I don't have any doubt that he is going to get himself overthrown eventually one way or another), Africa (once they solve their population and economic problems, the latter of which basically translates to telling the western corporations to **** off), and the Middle East (Iran is getting better, slowly but surely, as is Egypt), because any democracies that are born there are going to have to be more up to date, per se, to the issues that all this technology is introducing. Not to mention that there are few things more awesome than democratic spirit in the full flush of a successful coup by people who've never tasted democracy before.
Speaking of which, any similar stuff going on in canada?