It's funny, because on the one hand we have privacy advocates demanding simpler and plain language TOS's that aren't so draconian. On the other hand, if you don't have a draconian TOS's, you're going to get sued by a privacy advocate.
Which is really the whole point. There's no room to negotiate the language of TOS, so it naturally is written to only benefit Facebook or Shutterfly.
Know that you're just giving an example. Points about simple and honest business model comment. Maybe this is considered simple now in terms of the Valley. The honest part, almost no one reads the TOS/EULA.
So I have tons of images associated with accounts. So, why can't I do a 'google' and image mine too? Aaaand, I can sell the results to whatever data company?
Suddenly, higher margins and fulfills corporate charter.
(By the way, too high margins are even illegal in some countries)
Companies that buy the aggregate big data package of all individual customers are also customers.
A simple EULA boilerplate "we can do whatever we want with your images" is usually enough to disclaim liability or privacy... Because you chose to upload them out of your control.
I didn't say it was ethical.
Privacy advocates aren't looking to let companies invade everyone's privacy as long as they do it right, the advocates want to stop it in the first place.
Have you considered that a company could use unintrusive technology, operate on private data only to the extent fundamental to delivering the product the customer has purchased and removing the surveillance clauses from their contracts of adhesion? I suspect privacy advocates might possibly leave them alone if they did that.