Privacy issues that weren’t possible before due to cost are now pennies to exploit. Also keep in mind as it points out people were using census data to drive gerrymandering efforts, so these attacks are real and have been going on for a long time.
One notable thing we have today that we didn't have 100 years ago is a computer. Before, you could reasonably assume that recreating individual records wasn't feasible, at least not on a large scale. You can't assume that now. A 4 digit password was safe for hundreds of years, but it would be a security lability today for the same reason.
(Also, linkage. There are more data sources to cross reference now with the internet and social media and web tracking and hacks - the record footprint of Americans even as recently as the 70s and 80s was dramatically lower!)
No it is not an overblown problem.
Arguably the defaults for differential privacy are too robust but that is a different story.