Why? This honestly doesn't bother me. If it were used for the express purpose of hunting down things like copyright infringement it would, but it's in majority for the prevention of terrorism.
On a tangant Phorm doesn't bother me, because, suprise suprise, I prefer ads that are targetted at my viewing habits!
But the problem is, that it isn't used to track down Copyright infringers
yet, but could quite well be in the future. I'm not one for this "oh it's 1984" tinfoil hat business, but the problem is that these gradual changes and systems that are drip fed into society wield great power, that can potentially be abused.
I'm a lot like you. I see technology such as the above, as I did with CCTV coverage, and think "well, I've got nothing to hide, what's the problem?" - but the dilemma does not come from the technology and what good it can do, but rather how it can be abused.
Who are we to trust the government to do right and ensure the technology is only used in a right, and justful way? Who decides what is right and wrong when browsing the Internet? Systems like this can enable the UK to become like China is, with any content opposing the current government blocked, using the Internet only as an example.
The fact of the matter is, the human being is a complex thing, people can have an agenda and serve that agenda by abusing such technologies as the OP stated, all the while claiming to be acting in a just way.
DOWN WITH THE SYSTEM!