Things look different in a small high-trust country with multiple political parties. Because the country is too weak and insignificant to change the world, the government tends to focus on administering the country. Because there is a lot of trust in the society, the people who want to serve in the government are usually ideologically motivated to serve the best interests of the public. It's not a particularly lucrative or high-status career, so people with other motivations tend to go elsewhere. And while people may disagree on what exactly are the best interests of the public, there are many viable political parties to choose from.
Private firms are allowed to be evil in the sense that they can put their private interests ahead of public interests. Most of them are. And because they are private, the public has only limited means to regulate them when they misbehave blatantly. They can't, for example, vote the directors and shareholders out and replace them with people who promise to serve public interests.
Given that it's already out there, there's not much more to fear in terms of a slippery slope. All that's left is to at least force the public sector to disclose more of what's going on and regulate how private interests are allowed to use it.
Otherwise, we already have the dystopia you're imagining, we just don't see it as well.
The government has the monopoly on violence. It always has access to the data held by private parties. The government and the people serving it may choose to respect laws and other promises. They may choose to avoid accessing private data without a valid reason. But if the government chooses otherwise and requires private businesses to hand over their data, the businesses will most likely comply. If you don't want to give a government-turned-bad access to some data, that data must not be allowed to exist in the first place.
Which country are you talking about? Surely not Norway, which is a monarchy.
Yes, it is a constitutional monarchy which was introduced by vote, and given its support in the population, removing the monarchy would be quite undemocratic. One of the more radical parties in parliament has raised the issue many times; in 2019 their suggestion to abolish the monarchy got a record of 36 votes in parliament (against 130)
Another thing that sets the government and private sector apart is that the government is under (mostly, even if indirect) democratic control, or otherwise accountable to the public, whereas the private sector can get by with bad press, so long as they can continue to operate. As an individual of average wealth, it is far less difficult to influence government policy and politicians as opposed to doing the same to a private organization.
Really, this is not about choosing between "good" and "evil", it is about choosing which evil you are most likely to be able to contain.
I'm not a hard disagree, but I think it's easier (though not easy!) to democratically will your government to regulate private companies than it is regulate itself.
Imagine living in a state where abortion laws now allow individuals to sue other individuals who have had abortions. A corporation could use grocery data to find and sue individuals who are likely to have had an abortion. The analysis would be a bit more complex than this, but just looking at grocery data, scan for people who bought pregnancy tests, bought fewer tampons than usual, and aren't buying baby food a year later. No violence, totally legal, and absolutely devastating to the individuals involved.
https://en.wikipedia.org/wiki/Pinkerton_(detective_agency)#H...
The leaders of governments can and do act like that.
Corporations are no stranger to violence. They're no stranger to organized crime dealings and tight relationships with governments. Coca-Cola for example has straight up assassinated union leaders.
It is a core concept of law and statehood; if you consider it nonsense, you consider statehood of your country to be the same.