How many people can send /receive such letters? You would have to be INSANE to put anything in writing, just as John Gotti didn't send memos on Gambino Family stationary. Merely complaining about brown veggies or lack of veggies would get you locked up for spreading dangerous propaganda.
The internet on the other hand...can spread those ideas in an instant. Not to mention planning
But most people were born into the regime eventually, they had no clue about alternatives. In fact they feared the alternatives. Dangerous ideas were nipped in the bud and entire families sent to each country's version of Siberia.
They didn't need to intercept much: Just as most US citizens in a "decent" neighborhood would report a shooting, quite a few would report even their family members for saying dangerous things. Then, a nice chunk were officially part of "KGB" network, informers. Maybe 10% of the population...
Asking the population to report on itself has limitations. They have to know what is to be reported. They need to know what is good and bad. But what if the dangerous idea is something that you don't want the population to know anything about? What if you want to supress an idea without anyone knowing what you are doing? That's the modern context: removing data and changing stories without anyone knowing that you are pulling strings.
Oh they did. Everything foreign, anything that is not the party line. Report to the local police and they sort it out, keep an eye on things. When you risk 20 years in a gulag AND your family sent away you keep your mouth shut. You learn from other people. https://en.wikipedia.org/wiki/Alexei_Navalny would have lasted 30 minutes under Stalin, give or take a few :)
Also North Korea https://en.wikipedia.org/wiki/Kwangmyong_(network)
That is the old thinking. Today many such countries are realizing that such information networks are great tools both for surveillance (China) and manipulation (Russia). Telephones were once seen a threat, until they realized that intercepting telephone calls is far easier than intercepting letters. North Korea is probably behind the curve on this front. Give everyone a smartphone. Get them to direct as much of their lives as possible through that phone. Now you can watch them better than ever before. That students will use the phones to organize protests pales in comparison to the intelligence streams they create.