There is definitely a fine line here. Nobody likes being spied on or micromanaged, however your employer's equipment and resources are not the correct venue for you to support your porn habit or do your day trading. To avoid the appearance of being spies, a company can utilize a Net Nanny type firewall application, but sometimes these can be more intrusive than helpful. I search the internet a lot in my line of work and I am constantly having to call our IT Gurus and ask that a page be added to the "allowed" list. I have also had to call them back on occasion to tell them to put it back on the blacklist.
Our facility has cameras all over the place, originally placed because of the area of town that we are in and the size of the facility. It helps find and remove trespassers that sneak into the facility. RFID badges and automated gates have helped with this but it still occurs on occasion. We have also used the camera system to find an O'possum, raccoon or even a deer that has managed their way into the building. (Oddly this happens more often than one would think.) We have also, on occasion, used these same cameras to identify employees that don't seem to think that they should actually have to work 8 hours to get paid for it. Is that spying, I don't feel like it is.
This is about as far as our management has decided that they want to go with surveillance. I have contracted with other facilities that are much more "anal" about this type of thing.
Overall, my opinion is, you signed a contract to work at your workplace. In doing so, you agreed to basically anything legal that your employer chooses to do to your environment. I work for an industry that is in its sunset years and I doubt will make it another 30 years before be eradicated, but the competition is fierce. There are actually corporate spies and they exist in real life, not just on the prime time shows. We had one escorted out by the police not long ago. They were hired into a management slot and after a couple of months began downloading items onto a thumb drive before leaving for the day. This was trapped by one of the surveillance applications used on our system.
Anyway, just my thoughts. In today's economy, we should be thankful to have a job and within reason put up with the employer's quirks.