It's about not giving more info to the government than is necessary. There should be a minimal amount of info sharing from citizens to governments, ideally. The way some EU countries require citizens to register an address even if they don't have a license, and just 'in general', is super sketchy to me.
Not every agency has access to every other agencies data, and that's how it should be. There is nothing stupid about implementing principle of least privilege at the government level in the context of data access.
It is kind of stupid to advocate for just giving everything carte blanch to the government when they don't need it, as Europeans tend to be so eager to do.
Yes, the government has access, but let then get a warrant if some agency has a reason to access it.