They're wannabe-Morlocks.
That has to do with the crowd you ran into. Burning Man is many things, but among those, it does have a lot of art. Did you go to SF Museum of Modern Art? or any of the art anything's? Same with sports. There are a ton of nerds that call it sportsball and think they're clever, but at the same time, the Superbowl is this weekend and there's a lot of sport-related things happening around the Bay Area that you wouldn't know about if you didn't look for it. So I'd be wary of drawing conclusions from such a limited sample set.
So you get to a point where mass surveillance is justified by the anti-crime angle; there is no contradiction, libertarianism logic where you can live and let live requires no crime...
Whatever technical definition of Libertarianism you're using is very narrow. Nobody is under the delusion that Libertarianism requires no crime.
You see, that's the great thing about Libertarinaism, it can be whatever you want, and when there's something you don't like you go "but that's not real Libertarianism"
Those who are fundamentally humanist want to tear down systems of oppression because it pains them to see their fellow humans abused and brought low by corrupt laws and regulations. They (perhaps naively) imagine that if the system was dismantled or at least shrunk to minimum size, basic human decency will step in to fill the vacuum and people will thrive. Folks like Penn Gillette are the face of this group.
The narcissists are drawn to the movement because they feel like “if only everyone would get out of my way, I can do GREAT THINGS™ “. They like ideas like social Darwinism because they are already privileged enough to not be worried about losing in a survival of the fittest contest, and don’t tend to concern themselves with the second order effects of dismantling the system because it is simply an immoral impediment to their greatness. Peter Thiel and folks like him are the face of this group. This is largely the strain that has taken root in SV.
It's a generational thing I think, you see public money being spent on junk, and laws used to entrench and make competition hard; and you think "why do we want the government to do these things at all?". And if you look at common ideas around 20 years ago, the default answer was libertarianism.
Surveillance does not directly violate the non-aggression principle, and a myopic adherence to minimal principles without any consideration to where they lead is the central feature of libertarianism.
Your definition, maybe. Redefining that idea and assuming it is accepted as fact is a touch arrogant.