Embarrassment is an emotional state which sometimes occurs when the image that we seek to project is undermined. It's painful, but usually temporary. By loss of dignity, I mean that an individual is not being respected if they are not permitted any control over their person space. Humans seem to naturally require some degree of control over what may be witnessed by others and what is theirs alone.
>>nearbu+Dr2
Yes, psychological harm is one of the most powerful arguments against privacy invasion as I see it. The other being the potential for social or even physical harm, i.e. misuse of that data by people who are able to gain access to it.