Quoting myself from three years ago, when I had the foresight to link it, albeit from a friends-locked post:
Danny O'Brien wrote a brilliant blog entry (update: link broke, essay is now here) about this effect, which I stumbled across [in June 2004]. In brief, he points out that we have three different "registers" (types) of conversation: public, private, and secret, and we communicate in different ways in all of them. In particular, we guard ourselves strongly when "on the record" (in public) in ways that we don't when we're addressing friends or associates. "Private" conversation is not intended to be hidden, but we assume a context that random listeners might not have, and it's aimed only at the audience being specifically addressed.
"Ah," you might say, "so the private register is like an LJ friends list." But the insidious thing is you would be wrong. A friends-list post is secret. It is restricted to only the desired audience, as opposed to "private" conversation, which is at worst hidden by obscurity. The public register is a loudspeaker and a soapbox; secret is a closed-door meeting; private is dinner chat at a restaurant.
The loss of privacy doesn't mean the loss of the secret register (though that register is certainly shrinking, and that's frustrating too). The loss of privacy means the loss of the private register. The notion of being consistently either on the record or totally hidden.
Before the age of the Internet, the vast majority of our lives was on the private register. This is still the case to a large extent. As technology continues to improve, it won't be.
Humanity can live without a private register, but I (still) think our lives will be the poorer for it.
The piece's author, by the way, replied to my e-mail last night*; he says "If you liked it, I did a more wandering talk about the same topic you can download here."
(I also mentioned to him that, given four years of hindsight, I'm really not convinced that the shine has worn off of distant mockery for the masses. "No, me neither," he responded. "And my day job [at the EFF] continues to teach me that the interactions between privacy and free speech aren't done with yet." True dat.)
* Given that the entire purpose of this post is to lament the ever-widening reach of the public sphere, I really had to think about whether to post excerpts from a (secret-register) e-mail conversation. Yes, massive irony. But on balance I believe no harm is being done here; there's nothing actually secret in the two lines I quoted. The link can be found via a Google search already and Danny's bio is listed on the EFF staff page.