In other words, the parameters of 501(c)(4) organizations were already well established, and being primarily "political" (when you think about it, a rather vaguely broad term) is just fine, you're focusing too much on the words of art "social welfare" vs. what they mean in practice.
Even Obamacon (con as in "conservative") Peggy Nonan has woken up and realized the implications of this (http://online.wsj.com/article/SB1000142412788732441260457851...):
"What does it mean when half the country—literally half the country—understands that the revenue-gathering arm of its federal government is politically corrupt, sees them as targets, and will shoot at them if they try to raise their heads? That is the kind of thing that can kill a country, letting half its citizens believe that they no longer have full political rights."
Do you really think that's OK?
It is not just the problem that they were targeted based on name (I actually think that's pretty reasonable) but the questions that were asked, the time it took to get approved (or denied) and the fact that IRS lied to congress about it.
Are there any other politicians in power at the federal level these days?
Search queries alone will probably tell you which way a person is leaning in an election. That by itself is not good in a democratic process hinged on secret ballot. What if the information of everyone that voted for a given candidate is collected, passed under the table to another "bad guy" in another agency, such as IRS, and then used to inflict financial harm. Yes, very far fetched, but such power is an enabler.
It seems that having courts grant warrants provides a necessary level of review by a psudo-independent body, as to sufficiently protect against undue invasion of privacy.
Based on the description in the article, I'm not sure if there are a lot of protections against personal use, like spying on a girlfriend. (When I used ChoicePoint for background investigations, it only recorded my "permissible purpose" selection, but no real validation, just an audit log of the search.)