Possibly. Unless the gov't is doing the work themselves. They have aleays been horrible at such systems. Consider fraud in any gov't health program or programs like food stamps. The fraud is huge.
If private firms do the work it depends on who gets the contracts for such projects. This could be something someone like snORACLE gets their fingers in and it gets blown up so big it never works. But, if outfits like Choicepoint and others get involved this idea could get interesting.
One thing you are correct about. Building various real-time data analysis systems looking for negative patterns is not that big of a deal. And if they are constructed correctly there are no real privacy issues because the system does not care about Joe Blow. Not that there is much in the way of electronic privacy anyway. That cat left the bag years ago. And the only way to put it back in is to outlaw electricity. I don't see that happening.
Yes, all the Usual Suspects are involved. There is a ton of money going down for this stuff right now, and everybody in the business knows it. This One Giant System To Rule Them All is getting the headlines, but behind the scenes there a dozen dedicated, single purpose, "look for this" type systems under development. I'd tell you more, but then I would have to kill you.