That sounds all nice and small-town rosy, but I would pick anonymity any day. Road to totality and 1984-esque society only takes 1 step at a time to build, and this is definitely one of those steps. Although coming form smallish town, this familiarity with shop owners ain't something high on my list of priorities, in contrary.
The strongest reason for it would probably be the old 'power corrupts', as we can see just about anybody with access to it, be it a person or organization in the past. No reason to be so naive to think some other place is special and avoids it. And knowing basically everything about any individual is a massive amount of power and very personal. Also rarely are these kinds of laws repelled, in contrary, the data are just too sweet and there is always the next terrorist threat to prevent.