Is Privacy a positive, or merely a protection?

During our privacy deliberation, we talked about identity theft and other safety concerns, e.g. being Googled by a stalker, etc. One person raised the alternative of a caring community where members watch out for each other. We talked about how that kind of community often stifles non-conforming persons and drives them away to the anonymity of the big city. The question we came away with is whether it is possible for a community to be sufficiently tolerant of diversity that individuals do not have to hide what makes them unique.

The deeper question is to what extent is privacy a reaction to intolerance and to what extent would we still want privacy even if our community harbored no prejudices that would include us? Do we want privacy to avoid humiliation, or is it something necessary for our spirits to flourish. Is privacy just protection from the cruelties of the world, or is it something positive in itself? Do those people who proudly say, "I have nothing to hide" really have no private areas in their lives?

Certainly the reason I want privacy for my reading is so others will not leap to conclusions about what kind of person I am. Usually, I want to tell others about books I have enjoyed, but I have read about topics I'm not yet ready to wear on a sandwich board. And, I know that if someone was watching I might skip some titles, because we still have people who think that they can predict your behaviour from what you read.

So, what do you think? In Utopia would we still need privacy?