Is the government all up in your grill?

In his fantastic lecture on the the Rule of Law in chapter 15, Hayek mentions one particular feature that distinguishes a free society from an un-free society: A "Recognized Private Sphere." He doesn't really elaborate on this further, and is quite ambiguous in his mentioning that we "Can no longer make this claim today." Is Hayek stating that the developed world circa 1960 failed to recognize the importance of a personal bubble? I don't think anyone in the United States at this point would disagree that the implementation of the PATRIOT ACT was certainly a step in the direction of limiting personal freedom. Our government currently and legally holds the power to monitor your phone traffic without your permission! I am pretty sure Hayek would have had a conniption upon hearing of such a thing. I found myself very much agreeing with this notion after receiving a mandatory TSA pat-down at the San Francisco airport three weeks ago.

So, if we operate under the well established assumption that a free society is one that recognizes and respects a personal sphere, and assume that "within the United States at least" our personal spheres have been, ahem, coercively penetrated by the government on more than one occasion, can we the conclude that our society is un-free? Or at least becoming un-free? If we safely reach this conclusion, what repercussions does it hold? Is there any hope for the reemergence of the rule of law? Will this trend continue, or level off at a less-free-but-still-sort-of-free state?