As time went on, computers became more mainstream, and lots more people started using them as part of daily life. This didn't mean that the number of antiestablishment computer users or hackers went down—just that they were no longer nearly so high a percentage of the total number of computer users.
So the answer to "what happened to all the hackers fighting for personal freedom and privacy?" is kinda threefold:
1) They never went away. They're still here, at places like the EFF, fighting for our personal freedom and privacy. They're just much less noticeable in a world where everyone uses computers...and where many more of the prominent institutions actually know how to secure their networks.
2) They grew up. Captain Crunch, the famous phreaker, is 82 this year. Steve Wozniak is 74. And while, sure, some people reach that age and still maintain not merely a philosophy, but a practice, of activism, it's much harder to keep up, and even many of those whose principles do not change will shift to methods that stay more within the system (eg, supporting privacy legislation, or even running for office themselves).
3) They went to jail, were "scared straight", or died. The most prominent example of this group is, of course, Aaron Swartz, but many hacktivists will have had run-ins with the law, and of those many of them will have turned their back on the lifestyle to save themselves (even Captain Crunch was arrested and cooperated with the FBI).
But it's also unquestionably true that it's much easier to be a "hacker", in the sense we think of from the 1960s-80s, in a time and field where the hardware and software is simpler, more open, and less obfuscated. As such, I think it's probably not helpful to long for those bygone days—especially the "simpler" part—which we are clearly never getting back until and unless we make a breakthrough that is just as revolutionary as the transistor and the microchip were (and I'm skeptical as to whether that's possible, both in terms of what physics allow ever, and in terms of the shape of the corporate landscape now and for the foreseeable future). Honestly, a lot of the things that were possible back then, a lot of the incentive to get into hacking, was stuff that's actually hugely dangerous or invasive. Instead, I think it's better to focus on what we can do to improve the latter two parts of that equation: more open, less obfuscated.
Personally, I would say that the way toward that is pushing for, creating, and working on more open protocols and open standards, and insisting that those be used to enable more interoperability in place of proprietary formats and integration only with other software and hardware from the same company.
The alternatives are not doing evil vs starving. They’re getting paid well for doing evil, or getting paid well for doing good or at least neutral.