The most important reason for privacy is that without it, social norms calcify.

If a norm is outdated, oppressive, or maladaptive in some way and needs to be changed, it becomes very difficult to change the norm if you cannot build a critical mass of people practicing the replacement norm.

It is even harder if you cannot even talk about building a critical mass of people practicing the replacement norm.

For many norms, like the taboo on homosexuality which was strong in the US and Europe until recently and is still strong in many places today, the taboo and threat of ostracism are strong enough that people need privacy to build critical mass to change the norm even when the taboo is not enshrined in law, or the law is not usually enforced. This was the mechanism of "coming out of the closet": build critical mass for changing the norm in private, and then take the risk of being in public violation once enough critical mass had been organized that it was plausible to replace the old oppressive/maladaptive norm with a new one.

But yes, obsolete/maladaptive/oppressive norms are often enshrined in law too.