If the Internet really wants to self regulate, content providers and advertisers need to make privacy brain-dead simple. The first time I log onto a Web site that tracks my surfing habits and/or location, show me a splash screen with five bullet points summarizing what information it's collecting what happens to it. Give me a link to a plain-English description of the site's privacy policies and the option to click "no thanks" right there.
Is that so friggin' difficult? Do we really need another ten years of discussion for this to happen?
In the libertarian world view, a company would come along and offer that kind of service. The handful of privacy services that have arisen in the past ten years have all failed, however. The reason? There's not enough profit in protecting privacy, and way too much money to be made by violating it.
I'm really not a fan of government regulation, but sometimes it's necessary for the wellbeing of everyone. You can't force people to care about their personal privacy enough to jump through hoops to protect it. But you can force companies to care about it. That's what laws are for.