The question really is whether people actually think about their privacy

No they think: I've got nothing to hide.
Because most people do not realize how easy it is to connect the dots. A little data, from here (facebook, chrome, subscriptions), a little from there (credit card info, ssi), aggregate it, and Bingo we now your whole live story.

What this article shows is how fundamentally useless a privacy policy is.

Step 1: Create a company
Step 2: Write a privacy policy thats says "we are collecting data but we will not share it with anyone"
Step 3: collect data for years.
Step 4: monetize data by selling company to a third party.

In cases like this you have to applaud the government action for protecting the people from privacy invasions. Most aren't savvy enough to even recognize that this is an important topic.The defeatist "I've got nothing to hide" argument is way too prevalent IMHO.