The Problem With the 'Privacy Moderates'

[Android3.14]

34. Are we still trying to agree on terms?

If "having the government create files on people and examine their private lives without any evidence of criminal wrongdoing" is the starting point, but you say it is unnecessary for there to be a file, then it appears that you are trying to posit two contradictory statements.
Regardless, we'll try to grapple with your analogy.
The problem with it, is that it is far less than what the NAS is doing and is a weak example of data mining. If they were playing a game of Where's Waldo, few would have an issue.
My example of the sociogram shows a basic example of how data mining actually occurs, (i.e. combing a database for additional information or combining multiple databases for additional insight or hidden structures)
So no, I wouldn't consider your example "spying". If, however, the government were continuously, secretly, without a warrant, and without public oversight, recording those 500 people's locations, contacts, emails, etc. on the off chance that someone later might determine that a person with a red hat might be in the crowd, then that would be spying.