So, all in all, it's not that Germany's government is so privacy conscious, but we're simply stuck in a pre-digital world with no reasonable way to share data.
I recall one instance where the highest person at a university tried to get all the user's contact tracing data because of some incident (theft), IT explained that their request was not only illegal, but also useless, because the way data was stored would not allow to extract data without going to another official place and requesting the other half of the data which could only be accessed by the health department.
There is a german saying that goes a bit like: "where there is a feeding trough there are pigs". The idea of data scarcity is to avoid putting up things that can be used as food by pigs. So instead of defending data silos, you build them in a way that they don't become targets in the first place because they are of limited use outside of the intended use case.
Judging by the number of politicians complaining about data privacy, it works.
The US has a similar stature, the Paperwork Reduction Act, a "law governing how federal agencies collect information from the American public", with the aim being to "not overwhelm [the public] with unnecessary or duplicative requests for information" and that the data collected be "a good fit for its proposed use" and further still "To respect privacy, we avoid asking for personal information that’s not relevant or necessary." https://pra.digital.gov/about/
In practice, of course, this is all bullshit and any data that the government cares to collect is rationalized as fitting all those requirements.
So I'm curious if the German Datensprsamkeit is actually effective?