I fervently disagree. Having 'nothing to hide' most certainly means not caring whether someone is watching or monitoring you for a specific purpose. Should we let an irrational need for privacy stop major advancements in science and technology? I don't want to get too political here, but I'd like to point out I was part of a very effective stem cell cure to Parkinson's Disease (multiple years, no signs of deterioration with no upkeep), that was discontinued for legal/moral/'sense of' reasons. If you're not familiar with current treatments, youtube the surgical procedure for Deep Brain Stimulation implants. If this technology ends up being incompetent, and does not help separating good people from bad people, there is obviously no reason to implement it. However, if there is a statistically valid difference, should an absent need for privacy discredit the advancement?
Your second point is correct: the law is to be interpreted, and anyone can be convicted of a crime, if the prosecution tries hard enough. However, that's a very specialized case, and there isn't someone out to get everyone. Even being wire-tapped and watched 24/7, chances are you'll never interact with the people watching. If there's almost 0 chance of someone interfering with your life, why does it matter if your privacy is lost to them? I'm not trolling or playing devil's advocate - I really do not see why it matters. Someone I'll have 0 interaction with can watch me 24 hours a day, and it would not phase me at all. I only bring this up because you brought up terrorism. I also argued (your view) on Ex Parte Quirin several years ago, so I really have considered the subject.
Your Megan's Law example is really a tangent. I don't like child molesters, and I don't agree with statutory rape being subject to such communal ostracism - just like you. In such a case, yes, the law changing has screwed things up. However, it doesn't apply to our original point. You're arguing whether specific information should be publicly available, while I'm arguing whether already publicly available material should be analyzed. They already see your face, just humans aren't able to spit anything useful out.
I hope my point is clear.