Just because something is inherently evil (evil isn't the best word for use in utilitarian arguments, Jeremy Bentham uses pleasure & pain) doesn't mean you should never do it. If you take hurt as being inherently bad, you could argue that it is ok to do some bad to prevent other bad or cause good (Bentham again).
Besides that, I agree with you on everything else. If we are going to call invasion of privacy evil "just because," we should define it pretty soundly. If we try to define it, I think we find that it's mostly about expectations, so making some clear rules/agreements is important.
Se my comment upthread from here.
Ultimately, though, your example highlights the main problem: hurt is poorly defined. Hurt could mean anything from dumping them through to outright torture and everything in between.
Hence here is my worry in the privacy debate: I think everyone has a huge variation in what they class as privacy and how they feel it is being invaded. As a result we end up with lots of mixed up opinions - and, I worry, the risk that really serious invasions of privacy are passing us by.
I feel like we should be talking about it a lot more from a perspective of; ok these guys want to know about us, so can we sit and discuss how they can do that transparently and in ways that make us comfortable. At the moment I get this odd feeling it is turning into a 3 way combat between consumers, companies (who want data to use to make money: either ethically or unethically) and government who want it for a variety of reasons.
The government thing is the most worrying aspect. Im slightly biased because I count, really, as a consumer of private information - I "invade" peoples computers daily. I have only seen it ever done ethically but there is always the serious worry that someone could play the system or could be using it for their own ends. In the future that risk is only going to get worse; and when you add in the fact that once beurocrats get involved the data is even more at risk from outside attack it is a worrying problem.
How do we fix this? Completely no idea yet. But I do think blaming Google is a bad move; because they have stood up for our data in the past (publicly)... and perhaps it is not too late to get them fully onside?