Based on personal experience dealing with cockroaches when I lived in a rental apartment in Dallas after college, I can't think of a better insect to send out in droves. I've read about similar work being done by researchers at Texas A&M, where they described the cost of the insects and the electronics as "minimal." with the actual mounting of the electronics being the most costly as it's done by hand. Would be interesting to see how that works!
From the ground and the air, pretty soon well be overrun flying and crawling cameras. Beyond the interesting technology, it's pretty fascinating what this will do to our society, not all of bad of course. Drones are being used for science and journalism, also to protect your po I read this short article in Scientific American (Dec. 2012) called "Drones at Home." Scientists tracking organutans in Sumatra created their own drone with open-source Arduino hardware for less than $2000--the drone flew a route and sent back detailed data. See the journalism story here: Brace Yourselves, Drone Journalism Is Coming
Max - "Little Brother" I think you're right. Government tries to spy, but doesn't really have a great track record at a lot of things. Private Industry will be the really risk to to privacy and freedoms. There isn't always enough over site within the corporate world to prevent abuse of data.
The drone cockroaches is a pretty intriguing idea. I don't have a lot of experience with them so I don't really know if they give me the heebee jeebes, but it's a cool idea regardless.
Drones for journalism are pretty much already here. With a pretty decent quality camera equipped quad copter purchasable for a little over a thousand dollars, most news organizations can find room in the budget.