But traditionally one would have an expectation of privacy - not absolute, but in general - simply due to scalability. Even if you're walking down the street, there aren't enough police or other government agents to be able watch everyone. Technology fundamentally changes this.

Taking the point a bit farther - we have no expectation of privacy for the exterior of our homes. Does this, then, make it OK for the government to use audio recording devices that can pick up sound waves based on the vibrations of the home's panes of glass (because this can actually be done in some cases)? Similarly, the exterior IR signature of our home is theoretically in public view, but should we let the government monitor which rooms are occupied based on changes in the heat signature of the walls?