Earlier quoted context omitted.
The simpler explanation: they understand knowledge is power and are happy to use any convenient excuse to acquire it.
If knowledge was power then by the argument advanced above, they would be able to stop terrorist attacks. Why don't they? Surely the obvious effective program being claimed to not exist would be an excellent argument to expand surveillance operations.
If I was slightly more conspiratorial I would suggest that that is the 64 million dollar question.
In reality though, I think we are talking about two different types of knowledge here.
When I say knowledge is power, I'm talking about power over individuals. The type of knowledge that allows you to say "Hmm, those are some interesting emails you sent, Senator. Let's see if we can come to an agreement to make sure nobody else sees these." The type of knowledge that makes the average citizen think twice before making that Google search, or before posting a comment online.
Even with total info awareness, to stop attacks you need the ability to filter and flag the data you have to sound the alarm when needed. Fundamentally, that's a data processing problem and not specifically what I am talking about.