About 200 brits were mistakenly tagged as crooks due to a “clerical error.” If anything, this is what the database-driven police state is going to look like. It will collect information from inaccurate credit reports, public records scanned-in by bored public servants, out of date police files, and typos everywhere. Then it will be mangled by the cousins of the junk-mailers who dream up those wonderful alternate spellings of your name, merged with a decades-old IRS database still running on EBCDIC, run through a set of flaky perl scripts written by beltway bandit contractors who make more money on support than they do on original projects, then distributed haphazardly to dozens or hundreds of agencies and treated as utter gospel.
I think I forgot to mention the outsourcing.
“When there is more than one copy of the truth, there is no truth.” When lies and mistakes are replicated into private databases, they can be impossible to eradicate; delete all but one, and the bad information can still be replicated, just like any pathogen. It can take months to correct one simple piece of information in your credit report [I had to update a phone number last year, and made dozens of phone calls, many to companies who just act as further gathering agents and “caches” of info], and you can’t talk to a human being without buying a copy of your report.
I would expect it to be much more difficult to edit a “security-related” database that is guarded by bored paranoids who fundamentally don’t care that you can’t function in society, or that you got arrested by mistake, or can no longer fly, just because someone accidentally clicked the wrong checkbox. Or maybe you got an Ellis Island style name change, and it’s spread. “Sorry, Mr. Smit4, you’ll just have to live with it until the judge can effect the name change.” [Which will be approximately never, because he can’t find your bloody records].
A good answer to the question “Why are you worried if you have nothing to hide?” is along the lines of “How do I know, and from whom?” It doesn’t matter if your driver’s license photo and thumbprint and collection of RFID tags  match you; if the database backing them up can’t be trusted then you’re still not “safe” and the politicians and law enforcement types have sold you a bill of goods. Naturally.
I believe in a Gibsonite world of flaky, hackable databases and connivable networks much more than I believe that the Vinge Singularity is likely; as things get more complex, they get more flaky. Even if we jump-start AIs that are smarter than us (in certain areas, anyway), isn’t it a natural tendency for intelligent beings to invent stuff that is just beyond their control?
 “I’ve got all my city and state government tags on this arm, then the federal stuff goes on the other. Let’s see, Safeway and QFC have to be on opposite sides of the body, or they fight. Car and phones and power tools in my palms — man, I wish Sears could standardize on just two or three of these things. Banking, here and here. Credit cards right over my chest, and I shield those in public so I know I’m not spending any money. Matching tags for my kids, over my heart, of course. There are a bunch more, I’m basically running out of places to put these, and I hear that the DMV wants to move to the Mark-IV DynaSTix system next year, so there’s another, the third time they’ve tried to get their act together.
“No, I never was into punk rock. But it sure looks like it, dunnit?”