Hopefully this isn't seen as splitting hairs, but I'm going to take your statement from the engineer and divide it up:
> This is technically possible, there are the grounds for believing it is so.
I don't see an ethical conundrum here. Determining whether a system could be built is amoral at worst, or in the public interest at best. If an engineer says "this could be built" and a lawyer says "this could legally be built", that's when you get into a spot where you can have real societal discussions about whether or not it should be built.
If something is legal to build, but impossible to build (given current technology), then it's mostly an idle curiosity. If something's illegal to build, but technically possible, then there's reasonably compelling evidence that you probably shouldn't build it (save for, e.g. civil disobedience).
> I'll build it and maintain it.
That's where the ethics comes into play, and the grey area. If something is both legal and feasible, then it's up to you to decide whether or not it's something you want to be part of. I can look at the folks who built the mass surveillance system and say "I don't believe that was ethical", and others can look at it and say "I'm so proud of these people for defending my country".
An opposing piece of technology would be end-to-end encrypted messaging. In my world view, end-to-end encrypted messaging is perfectly moral. I believe that people should be able to communicate without having their conversations eavesdropped. But I also recognize that this does enable immoral/unethical activity as well; it's just that, to me, the balance leans towards private communication. Others may (and do!) disagree.