That small-town thing of everyone knowing everyone else's business is something separate from gathering metadata and the privacy concerns with the NSA etc that someone mentioned. You don't need to be on any social media for that, although being on facebook etc helps create much more data on you. The NSA, google, etc are not sitting around watching you eat breakfast and following your every move because they're not interested in you as a person. It's not personal. They just want to categorize you. It's an elaborate profiling system. Bg posted a little thing once that was supposed to determine your personality based on your facebook likes. It didn't work well, and wasn't very sophisticated, but gathering metadata is more along those lines than actually watching you. Take all the surveys people answer, all the likes they share, all the sites they visit, how many times they log into their emails, who their contacts are and who their family members are, what groups they're involved with, what political parties or candidates they support, what products they buy, and you can form such a complete picture of that person as to be able to predict what they'll do, how to best influence them, in what ways you can target them, and who they're likely to influence in turn, or turn to for help. But, they're not really interested in that person alone per se. If they need that information, it's there, at the ready, and dynamically generating personal content to influence that person how you'd like is hardly far away, and already in innocuous seeming products and services (ie. customers who bought this product also bought. . . or people who have viewed items on your wishlist are also interested in. . .or ads that change based on your web surfing and searching history)
You're giving out information all the time without realizing it, and it's being gobbled up and stored away, not because anyone is interested in you as an individual, but because it's useful in a large scale. You can categorize and sort people by their habits and data, their interests and even their family ties. You can bend whole groups of people towards a particular end, you can flag potential troublemakers, you can see the best way to get to any individual should you need to personally influence them. Information is power, and it's not because anyone particularly cares that you eat cornflakes for breakfast every morning, but because maybe it says something else about you, something they can use later. And maybe it helps to clarify your profile, to categorize you more neatly with the millions of other people in your same category. You create a pattern, a digital footprint that can be analyzed and stored and compared to other patterns and every action you take online contributes more information to that database. You are a dataset, and all they need is the correct algorithm to make that data flow where they want it to. It's a big deal, far more insidious than just being watched from a distance, and far less personal than many people imagine.