You don't have a right to privacy in a public space.
You will not have the same expectation of privacy as in a private location, but most legal systems recognise that walking out your front door does not mean you automatically give up all expectation of privacy.
Should all of your server logs be manually reviewed by hand for intrusion detection vs. allowing software to do it? You are both trying to track down and also stop criminals...
Your server analogy is badly flawed because it is analogous to your cop/intersection example. A more appropriate analogy would be universal connection/request logging at the ISP level. It's not OK to have all of your society's unencrypted Web requests recorded and correlated by your government. Do you think it's OK? Why? What benefit does it confer to the people?
No one cares or looks at the tape of you walking around the store unless there is a reason to do so. Should all passive recording cams also be stopped?