The wikipedia entry on surveillance state points out that such states have existed in the past, but are far easier to establish given technological developments:
Examples of fully realised surveillance states are the Soviet Union, and the former East Germany, which had a large network of informers and an advanced technology base in computing & spy-camera technology.
But they did not have today's technologies for mass surveillance, such as the use of databases and pattern recognition software to cross-correlate information obtained by wire tapping, including speech recognition and telecommunications traffic analysis, monitoring of financial transactions, automatic number plate recognition, the tracking of the position of mobile telephones, and facial recognition systems and the like which recognise people by their appearance, gait, etc.
The Washington Post points out the inevitability of the development of surveillance apparatus and discusses a paper (The Constitution in the National Surveillance State) highlighting two types of surveillance states authoritarian and democratic an suggest that we living under the former rather than the latter.
What do authoritarian surveillance states do? They act as “information gluttons and information misers.” As gluttons, they take in as much information as possible. More is always better, indiscriminate access is better than targeted responses, and there’s a general presumption that they’ll have access to whatever they want, at any time.
But authoritarian surveillance states also act as misers, preventing any information about themselves from being released. Their actions and the information they gather are kept secret from both the public and the rest of government.
. . . A democratic surveillance state would limit the data it collects to the bare minimum. Meanwhile, maximum transparency and accountability across branches would be emphasized. Congress and the public would need to be far more involved.
A democratic surveillance state would also place an emphasis on destroying the data that the government collects. Amnesia used to be the first line of defense against surveillance. People just forgot things with time, giving citizens a line of defense against intrusion. In the age of digital technology, however, amnesia no longer exists, so it needs to be mandated by law.
A democratic surveillance state would also require public accountability for the proper conduct of private companies that deal and sell in private information. It’s easy for people to be cynical about not being able to control their privacy when it comes to the government when they also feel powerless against private agents as well.
Having a “democratic surveillance” state sounds like an oxymoron, like having a cuddly hand grenade. Perhaps it would be better to just dismantle the surveillance state entirely and be done with it. And indeed removing the laws associated with the Global War on Terror would do much to remove the authoritarian elements of this state.