This is quite a good analysis of a very serious paradox.
That is, if a test gives 99% reliable results showing a "positive" (for whatever is being tested, say a disease or for terrorism), but only a tiny percentage of the test subjects have the disease or are terrorists or whatever, then if you test positive chances are overwhelming that you do not have the disease or are not a terrorist.
Years ago I tested positive for lupus and was very depressed for awhile. A repeat test was run and showed that I didn't have the disease. I was a victim of this "paradox."
I think those of us who are concerned about privacy should rally around a new monicker.
I suggest
Security with Privacy.
Sort of a "peace with honor" thing. It has a ring to it. The point is that we need to be as secure as possible while respecting the privacy of each of us and defending our private lives against government intrusion.