This is exactly the choice that David Brin presented in "The Transparent Society" back in 1996: http://www.wired.com/wired/archive/4.12/fftransparent.html

Ubiquitous surveillance is inevitable. The question is whether it is going to be whether or not the citizenry will have the same power that the authorities do. Technology is not the barrier; it is a matter of fighting for our legal rights.

The contrast is stark. One path is Orwellian, whereas the other path, while eroding some comforts that we're used to, promises us benefits that will more than compensate for it.