> There hopefully is, but it never ceases to amaze me how many, even highly intelligent, reasonable people, buy into the 'I don't do anything illegal, hence I have nothing to hide and off to the races we go' mindset.

I think this is due to a very large difference in mindset. Let's use your "fun side effects" as examples:

> how embarrassing it would be if a copy of your, ahem, correspondence with that cute intern was leaked

Maybe this embarrassment would be deserved? If you're having inappropriate conversations at work, maybe you should get called out on it? I'd argue that being able to hide these kinds of things contributes to a toxic work environment. So a) I wouldn't be having any correspondence with the cute intern, and b) I'd want to know if I'm working at the kind of place where that kind of behavior is acceptable (so I could not work there).

> simple guilt by association, like finding yourself on a watchlist after buying a car from a suspected Islamic militant or something similar

Big deal? If that's my only interaction with that person, no one who has access to that kind of information is going to care. I'll be accurately classified as a spurious contact and promptly ignored. I might be watched for future interactions, but since the interaction truly was a one-off, there will be no future interactions, and none of my other actions will be of interest to those who are watching.

So again... big deal?

> I am mostly met with a shrug and a variation on the theme 'Oh, they'd never do that / surely if that was to happen, it would be fixed in due course'.

If they mean "they" as in "themselves", why would you disbelieve them? They probably would never do any of those things.

> Basically, I more and more feel like the odd man out - as my position that 'Seeing as I am not doing anything criminal, the authorities have no business snooping on me' is seen as the militant one. Won't somebody think of the children, etc.

Because there are increasing numbers of people who share the view "the authorities have no business snooping on me" and who are in fact exactly the people who the authorities should be snooping on. However, none of them would ever admit to that, so they prefix that view with the same thing you did: "seeing as I am not doing anything criminal". Ostensibly the difference between you and them is that they're lying about the first part; but given that others have no way of verifying whether or not you're lying, can you fault them for assuming the worst and lumping you in with the actual criminals?

Because this is literally a thing criminals say, and criminals generally aren't beholden to telling the truth.

To put a finer point on it: the vast majority of criminals in the world are privacy advocates out of necessity. They may or may not be good at exercising privacy, but the easier it is to achieve effective levels of privacy ("effective" meaning "keeping their activities hidden from the relevant authorities/groups"), the more of them become good at it by default. It is becoming easier and easier to achieve effective levels of privacy (especially online), which means the privacy advocates are actually winning. As a consequence, so too are the criminals. You, as a non-criminal, non-antisocial privacy advocate might not want criminals to be your allies in this, but they are out of unavoidable necessity. (feel free to s/criminals/antisocial individuals/g, if you want to consider the point even more generally)