Regarding "it is very easy to get riled up about security". Yes, it is - as it very well should be. What happens if I hand a credit card over to a passenger and the "NeverLost" snaps an image of the digits? Highly unlikely but plausible - is Hertz going to guarantee PCI compliance of the footage? What if a group of individuals working for a defense contractor rent a car and are all discussing a secret, or top secret, program they are all cleared for? What are the implications of controlling that data?
I fully understand there is a gray middle-ground - however people have an expectation of privacy in a vehicle today. There are just as many counter-point scenarios to the "dog pissing" one presented (which is rather weak in my opinion).
That leads me to the question: do rental car companies have that much loss with which can be offset by having monitoring capabilities (video and audio)? There is considerable risk and infrastructure cost to implementing and protecting this "feature". I doubt that the amount of loss with regard to the vehicles themselves comes close to an all-encompassing monitoring system which could be based on the features that seem to be apparent in the latest version of "NeverLost". If the utility is for customer experience improvement - again, it's a large risk for Hertz to take on to provide minimal improvement in a rental experience and I doubt they've considered the edge cases that may put them in more fiscal predicament than not having it at all.
If anything these devices should be opt-in, meaning they can be removed by any customer prior to taking the rental vehicle. Customers will make choices based on privacy, if that seems minimal it may be today. But overall awareness exists and is garnering more consideration over time.