This article takes a distinctly negative tone towards this practice. What’s the problem here? License plate data is public information, it’s the same as if a person standing on the street saw your plate and told someone else. There should not be any expectation of privacy in regard to one’s license plate or the location of its sighting.
The US Supreme Court just made the distinction, when ruling that access to a cellular telephone carrier's location data for a particular subscriber required a warrant (and hence a showing of probable cause):
The Government’s position fails to contend
with the seismic shifts in digital technology
that made possible the tracking of not only
Carpenter’s location but also everyone else’s,
not for a short period but for years and years.
Sprint Corporation and its competitors are not
your typical witnesses. Unlike the nosy neighbor
who keeps an eye on comings and goings, they
are ever alert, and their memory is nearly
infallible.
That's the difference, beyond simple public/private. It's not that the license plate display itself is private but storing the data forever and being nearly infallible amounts to an unreasonable intrusion on privacy when handed over to the government. Notably, the USSC in a 9-0 ruling from 2012 held that attaching a GPS tracker to a car also required a warrant. _United States v. Jones, 132 S.Ct. 945 (2012).