Actually it was going reasonably well for 2 or 3 centuries, the mass spying is a recent development.
Thus the correct question to ask is "why/how did we break the system that used to work"
Thus the correct question to ask is "why/how did we break the system that used to work"
Following that rather than returning to a peacetime country and disbanding the associated military structure it was instead repurposed for a cold war in the face of another enemy that had sworn themselves to our complete and absolute destruction and which had the capability to do so. In the face of such constant risk of extinction almost any measure was seen acceptable to counteract the threat.
However after about 60 years the threat disappeared but the massive institutions built up to combat the threat then needed to continue to justify it's existence as careers and lives had been built upon counteracting the Red menance. Unfortunately these institutions did not cease to exist and continued the same tactics that it was profecient in despite the threat to the existence of the nation.
That's basically it in a nutshell.