IIRC many totalitarian governments, historical and current, made/make their surveillance blatantly obvious, because the chilling effect deterring people is much more valuable than the added intelligence value from keeping people careless.
After all, they want to suppress dissent, and they can't catch and arrest everyone - it's much more effective if people don't even dare to voice their dissent.
This is also why you see people in situations like the Arab Spring use known-insecure/monitored means of communication, because they realize that the value and power that comes from communicating and finding other likeminded people is worth painting a target on yourself (because you can't succeed without it, and if you succeed, there will be too many to prosecute).
Alternatively, a corrupt government might want folks to distrust their mass market phone such that they can have an individual come along and offer them a 'completely secure and private' alternative[1].
