Welcome to the Kali Yuga! The age in which down is up.
However, power is a transferable abstract (like currency). If you frighten a population into paralysis, then you may appear to lose creativity, motivation, economic wealth, etc. However, those losses simply become the "cost" of "buying" different forms of power.
I don't think we can assume those are equal (or even of the same magnitude).
[1] I don't think people have the correct perception of how oppression works in a democracy. The line between the FBI trying to get MLK to commit suicide and the FBI imprisoning random middle-class white Americans is a lot bolder than people assume. I think the misunderstanding stems from a failure to appreciate the nature of oppressive government actions within a democracy. It's not like oppression of civil rights leaders in the 1950's and 1960's was the result of a self-contained entity within government, who could turn its attention to ordinary people at a whim. Instead, it was a classic case of the majority oppressing the minority, acting through government. Oppression of the majority requires an inversion of that power dynamic, and I think is harder to achieve than people assume.
This is all, of course, not to justify oppression of the minority. Rather, it's to point out that your typical person is quite justified in assuming the government has little reason to oppress him.
My concern is that excessive surveillance leads inevitably to excessive perceptions of culpability.
One does not need to be formally found guilty for a run-in with the law to lead to "temporary" detention and legal bills; and if you can't afford the legal bills, maybe you might be forced into plea bargaining and end up with a criminal record. Even if this scenario does not happen, a genuine harm to one's reputation as a result of "helping the police with their enquiries" often occurs, especially if one is a middle class corporate employee.
If you can't post bail you could be in jail for months on end, with no compensation if eventually found innocent.
Corporations can, and increasingly do, pursue actions against individuals which result in prison time being imposed, including for purely financial transgressions which bear an exceptionally strong resemblance to debtor's prison.
Corporations per se do not have the ability to imprison people, they petition the government to do so. Corporations may sue people in the courts, but if the suit does not result in a criminal conviction (as opposed to a civil one), it does not result in imprisonment.
The same law made violating a Website's TOU/TOS a felony -- which in the case of 17 Magazine meant that visiting its website if you were in fact 17 was a Federal crime.[2]
The reform to the Computer Fraud and Abuse Act which would have closed the loopholes under which Aaron Swartz was blocked by Larry Ellison, CEO of Oracle Corporation.[3]
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Notes:
1. http://www.documentcloud.org/documents/217117-united-states-...
2. https://www.eff.org/deeplinks/2013/04/until-today-if-you-wer...
3. http://o.canada.com/technology/swart z-doc-director-oracle-and-larry-ellison-killed-aarons-law