The point of privacy is to ensure interpretations that flow from love. It's always fascinating to watch hippie-types question the need for privacy and modesty when they first realize that those practices are deliberately designed to keep people out. "How horrible," they think, "Wouldn't it be much better if we were just open and honest with one another: hey, this is me; love me for who I am." (Point of grammar: does that last sentence need a question mark? If so, where would it go?)
Of course, it becomes pretty clear fairly soon that this openness and honesty doesn't really work all that well. Firstly because people don't always love each other, and granting someone who doesn't love you access to all your vulnerabilities sounds superficially Christian but is, in fact, a recipe for disaster. Part of Christian charity means not placing temptations in the path of other people, including temptations to look down upon, or judge unjustly, someone else.
The second reason is that even if someone is looking with a good will, they will not necessarily have the commitment in love required to properly interpret what they see.
This is why it is only to lovers that we grant unconditional access to our bodies in all their naked vulnerability. Only a lover has pledged to unconditionally love the whole you and to see every part of your body as an expression of you; and it is only someone who knows you and your life who knows how to interpret and love the body that bears the mark of that life.
This unconditional commitment to love and to know requires a certain amount of proximity. Married people don't live together just because it's convenient. Married people live together because it is within the context of this proximity that one can truly know one another. Even if you could afford it and it would be more convenient, it would still be properly weird for a married couple (all else being equal) to choose to live in separate houses.
Now the argument for Google Street View is that the service involves nothing more than what you can see from the street, and that pictures taken from public property have been determined by the courts to be legally publishable and not invasions of privacy.
Nevertheless, I do think Google Street View is an invasion of privacy: morally, if not legally. Privacy is a guard against those who are not able to love you, either because of a lack of good will, or because of vice (Aristotelian, not Miami), or because of an ignorance that precludes an interpretation in love. It is this last reason that pretty much necessarily applies. Google's motto is "Don't be evil," and I feel relatively comfortable attributing to the company, in the present incarnation at least, a good will, but that in no way protects them from the misinterpretation that precludes the love that must flow from a proper essential judgment.
This is why we have no problem inviting a friend to come in and look over our whole house, but would be extremely offended and creeped-out if instead they elected to stand outside and peer in at it through the windows. Even if we are not doing anything in the house that we wouldn't do in a public place, by remaining outside the community and insisting on that outsider's view, the friend has refused to enter the relationship - that commitment of love - that will allow them to properly interpret what they see and so make proper essential judgments from which further love must flow.
The Catholic Church is not at all some sort of ideally liberal institution, and while she is 'liberal' in a somewhat-Classically Liberal sense, it is not because she thinks that such is the nature of man. There is no absolute, non-culturally- and non-socially- relative line which we can draw between “public acts” which fall under the jurisdiction of the community and might get punished by the state and “private acts” which any decent right-thinking person keeps his nose out of just so long as the shades are drawn.
The liberal principle of Catholic social teaching starts by asserting that error and evil have no rights, absolutely speaking. The sword of the state is there to punish wickedness in general – potentially any wickedness – for wickedness in general affects us all, but that there is some evil the correction of which would cause more harm than good. This was the Church Fathers’ reason for continuing to allow slavery, even though almost none of them thought it was a good thing in itself. To abolish slavery would at that time have brought down the entire economy and cast thousands upon thousands of former slaves loose in the society without adequate social, political, and familial ties that would allow them to live decent lives. (This was also the reason why SS Thomas and Augustine argued against outlawing prostitution: another evil we’ve been able to get rid of -ish.)
But of course the Church has never considered slavery a positive good, just a necessary and tolerable evil, so when the moment arrived that the economy of the world no longer relied upon it, she cheered on those who worked to abolish it. And we today consider it a good thing that slavery is outlawed and no longer part of our society and economy.
So the judgment of which evils we tolerate and which evils we do not is relative to the amount of harm we would cause in a particular society by attempting to stamp it out in that society. Our judgment of the nature of a particular evil is not relative, but our judgment of the tolerability of that evil quite definitely is.
So to be frank, given the right sort of society and the right situation, we should probably vote to outlaw fornication, whether between man and woman, man and man, woman and woman, or what-have-you, and punish it by some power of the state. But it’s pretty clear that we don’t live in that society, nor anything like, so people knockin’ da boots in the wrong bed don’t really have to worry about Christians trying to enforce that bit of the moral law.
But let’s stop pretending that the Catholic Church has ever said that the state has “no business” telling people what to do about particular things. She has said quite the opposite, over and over again.