This all seemed like a pretty run of the mill story about an insider violating company trust, and then getting caught - until the final sentence: "Among other things, a desktop monitoring system that took screenshots of employee workstations in one-minute increments helped Hostgator officials quickly zero in on Gisse." Not something I'd want on my personal system, but it's exactly the sort of thing that I think every…
I'll never work for any employer who does that, so I'd have trouble calling it a reasonable thing to do.
Anything with lots of confidential information, or anything financial, and you are going to want to monitor all the people with access constantly. You may not want to snoop real-time, but you are going to want to be able to find and fix breaches after the fact, and do root-cause analysis.
It's not a matter of trust in the IT people, it's a matter of people go crazy sometimes, and people make bad hiring decisions sometimes.