I think the fundamental question is if people are aware of the information that’s being collected about them online (both what they are sharing themselves and what is collected by online companies) and how it’s being used.
It’s less about the government coming in and protecting us from ourselves and more about using the existing rules established by the FTC to ensure that companies are providing people with enough notice and controls. Indeed, this is an issue that is already getting a bunch of traction wit hthe recent series of FTC roundtables and Rep. Boucher’s legislation working its way through committee.

To date, the privacy statements, which are the primary way people are told about their information, have proved not to be sufficient in giving people the information they need to make informed decisions. There is a group of companies working to address these issues. http://www.huntonfiles.com/files/webupload/CIPL_Use_and_Obligations_White_Paper.pdf