Holy thread revival, batman.
Molested, eh? That's a bit melodramatic. Klara Yoon and Severin Koller (yes, he's Austrian, but is in Berlin often*) seem to do fine. They aren't forced to be scrutinized or critiqued by their every gesture. People are just there, doing their own thing, and I think it's important to preserve those moments for future generations. These people are not generally scrutinized themselves in my experience, because while the photo may include them, the photo itself carries meaning far beyond them. It's their image that happens to represent something greater. I could care less if so and so did such and such, I just found something about them interesting, in an unbiased, impersonal manner. It's usually the photographer that is scrutinized, not really the subjects. As for being embarrassed, well, I think as a street photographer, I have to ensure that I do not publish a photo including someone that I could see being embarrassing. I think street photographers have a moral duty to ensure that their subject's likeness is not ruined by their photo being taken. Obviously, certain street photographers may have different opinions, but that's my stance.
Honestly, I think we sometimes take ourselves too seriously in the West. People are a lot more laissez-faire about this, it seems, in the developing world.
* Then again, I hear Berlin is a bit of an anomaly within Germany and have heard it referred to as very un-German. People seem to be more laid back, with less rigid schedules, more emphasis on the arts, so maybe that has to do with things working out better vis a vis street photography in Berlin.