On paper it is chilling. In reality, I think the feds are trying to create something so massive that it will be practically worthless. Corporations trying to accomplish this are starting to talk petabytes, or a trillion bytes of data. Just the data hygience, matching and retrieval considerations are daunting, in organizations that deal with terabytes (trillions of bytes) of data on a daily basis. I simply do not think the feds will be able to create this monster - for cryin' out loud, they can't even create a manageable system for the IRS, and all the information has a common key on it - SSN/TIN. They will implode if they try to match all the data from millions of sources for over a quarter of a million persons, none of it with a common linking key. To me, what DARPA wants to do is almost comical.
However, this database would still have a use. It will fail to pull a terrorist suspect name or two out of the miasma using modeling - but it would be VERY useful for entering a name or two and getting a sh**load of personal data to use against someone. That IMO is the greatest danger of this beast.