This could be a big problem - let's say you run for office and someone has gotten your school records. When you were in school, you talked to a counselor about being molested. Someone finds this out because it is in your FBI record and now it is leaked. Why was it in your FBI record? Well because you contributed to something seen as "terrorist" such as an environmental group that was latter found not to be.
You can say that you have nothing to hide - but that is the wrong way to think since we are suppose to be based on an innocent until proven guilty philosphy. By that means, it should be why should anyone know anything unless they need to. Maybe I don't have anything to hide but maybe I would rather someone not know that I was molested, had psychiatric problems, was seen for eating disorders, had a medical problem, made a D in French, etc, etc, etc. Especially when it comes to the first examples, there are some things that people would really rather keep secret - they may not be ashamed of it, but not want to relive it.
As far as it being a slippery slope - it has already gone down that path. I believe in Las Vegas elements of the Patriot Act were used againt people (I think it was Mafia, but I can't remember, either way - it was domestic crime not related to terrorism in the slightest). The Patriot Act was passed to be used for TERRORISM not domestic criminals. However, now that agencies have the ability to use it, they are using it for every thing out there that they can.
Luckily, people are fighting back. Something like 4 states and over 300 cities, towns, counties have passed resolutions that they won't help support it. It was passed quietly when everyone was still afraid based on 9/11 and Bush/Cheney/the others in their administration can say all they want about it but it doesn't make it right or mean that it should be passed again when it expires.
The thing about essentially circumventing FERPA and the sneak-and-peak searches... honestly though, do you see it as a problem? if you have nothing to hide, why would you worry about any of this?
you may say it's going down a slippery slope, but it hasn't gone there yet. big brother is watching me? so what? they'll get bored after about the tenth time they find Debbie Does Dallas on my computer.