Yes, the argument works both ways.
Do we have something to hide ? Of course we have, for reasons of personal security. Security from criminals, the effects of society, the greed of large organisations, the powers of the state, and the greed of individuals within the government. From the present state of affairs as well as from everything that may follow anytime in the future.
Just remember how seemingly harmless records about personal religion were misused during the second world war to exterminate certain groups of humans. With all the surveillance and data mining in place today it is predictable that not a single target person will survive the next holocaust.
One of the central properties of a democracy is the division of powers. Powers must always, and *at any time* be sufficiently divided that the people as a whole are able to take any power back from the government, and even replace it, if necessary.
A single short period of concentrated power (vulnerability) is sufficient for the power grab of a dictator (attack), hence it is a security hole. Unfortnately, this kind of security hole is the most dangerous imaginable, because both the motivation for the attacker and the potential damage are maximal, and the latter grows infinitely with the former.
Whatever a state does, no matter how much pain and damage it causes, is legal under the law and "good" under the moral framework of that state. Hence it follows that whenever people feel different that must be illegal and immoral, and the current state must protect itself from changes with surveillance, weapons and social frameworks.
Hence the natural goal of the state is to secure its own current existence ("national security") by concentrating power and using it against the people, which is quite the opposite of democracy and it's characteristic division of power which protect the freedom, independence and safety of people.
And the natural goal of powerful individuals is to accumulate (and *not* divide) power. (And use it to accumulate even more power in a loop of exponential growth, like a black hole in space does with matter and gravity.) The natural way to achieve this is to create problems, threats and fear, and use them as an excuse to concentrate and misuse powers in the clothes of the government.
By the way, this is what "Star Wars" is all about.
President, ahem, Chancellor Palpatin: "I promise I will restitute the powers that I have been granted as soon as these exceptional circumstances are resolved. My first action is to send a large army to find and defeat the terrorists, ahem, rebels."
We all know how this led to the dark age of the hated imperium. If you don't understand this, go and review the first three episodes with your brain turned on.