Demanding a social media identity or password is a great idea if you want to paint a huge target on your back for a discrimination lawsuit.
Said social media account will contain a lot of information about whether or not you are a member of a protected class. Good luck proving that you didn't use it in your hiring decision.
If I still cared enough about writing software I'd probably do a startup around some of this. Instead I'm writing SF about it.
I would act the in the same manner you would as well, it's not worth working for a company if they don't have some very basic principles and it's a huge red flag. If they don't respect your privacy in the interview, they probably wont respect it in day to day business. But just like you explained we have to be careful because there's a lot of people who don't really have a choice, especially in today's job market here in Australia; a lot of people would have to decide between privacy and their ability to pay the power, rent, food, etc.
I know this does happen sometimes now. What happens when saying "I don't have a facebook account" becomes a significant enough indicator that your're hiding your past?
I've heard stories of people at airport customs attempting to enter a country and having to try explain to the customs officers their lack of web presence or social media posts that they would otherwise use to corroborate and back up their intent for travel.