Let's say that every business adopted this "your passwords or your job" policy. There will be a set of employees/applicants with enough leverage in the job market that they can say "no", and move on with life.
There will also be a (much larger) set of employees and applicants that do not have that kind of leverage in the job market, and have to make a choice between their facebook password, and the freedom to starve. The former can rationally say "no". The latter rationally can't.
Limiting morality to those who can afford it doesn't sit well with me. I'm completely fine with the government stepping in to mitigate the effects of undue coercion in society.
Those who think that coercion only exists at the barrel of a gun, lack a certain amount of imagination.