For the land of the free...
...they are being awfully nosy. And Europe has for far too long just acquiesced or outright supported that attitude. In fact, European citizens are far worse of than American ones. Frankly, while this is reasonably good news, it's only a drop on a hot plate -- not nearly enough.
Next to mopping up the damage from the terrorist scare kneejerking fest and resulting security circus, we --as in us the citizens forcing our politicians do to the right things for once-- basically need to make sure of two things:
First, we need a government ID management system that enforces privacy and allows for things like multiple identities, reputation grading, social mobility, and a host of other related features. This will be tricky, but quite necessairy, and when done well we only need to do it once. Most important is being able to prove entitlement to something or to hand over a well-defined limited subset without handing over the entire dossier, as is the case now.
Second, we need to very carefully decide what access to information law enforcement may force under what circumstances. After that you can figure out the details like what needs to be stored and for how long. I say most privacy-sensitive information that isn't already public ought to require a court order of sorts, simply to keep indepentent track of where the police are sticking their noses now. I also would not accept ``preventive'' gathering of information in any way or form.
In that sense this German ruling goes a long way to being a fairly positive one.