There are numerous reasons dragnet surveillance is bad, and these are only a few:
There are so many federal laws, no one even knows how many there are. Law professors and other experts have said everyone over the age of 18 has committed a federal crime, often unwittingly. Collecting and indefinitely storing information on the communications and other data of everyone in America allows retroactive and (necessarily) selective enforcement of these laws to target people who cause problems for people in power. Whether or not this is happening now, it inevitably will with a system in place long enough.
Privacy is generally considered a human right, and it should be for a variety of reasons, including to encourage a free society. People under constant surveillance by the government are less likely to speak negatively about the government or subjects that could be misinterpreted. If you know you're being watched by the government, even passively, and things you say are permanently stored and potentially on record, you self censor your own speech. Thus, this indirectly becomes a way to suppress free speech.