Also imagine people spying on you, in your home - if I am at home, how do I know if the camera is on? I assume that there isn't a big red light on the front, because if an intruder is there then that will give away the fact that they are being recorded. But if someone else, nefariously, accesses the device and starts recording me I would love to know that immediately.
Also, a potentially 'always-on' video & audio recorded in wake of Prism is actually more scary than people breaking in.
I love the idea though, and I feel like those issues can be addressed by the company.