Opponents of Gen. Michael Hayden's nomination as CIA director object to the fact that he's an active-duty military officer. I'm not sure that's the best argument against Hayden, since he wouldn't be the first such to run the agency. That Hayden happily ran a secret surveillance program that violates the Foreign Intelligence Surveillance Act ought to be a bigger concern.
But if you want to worry about a military/surveillance nexus -- and you probably should -- there's plenty to worry about quite apart from Gen. Hayden and the NSA. There have been a number of unsettling reports in recent months about military intelligence officials developing an unhealthy interest in peaceful protest groups.
The history of domestic surveillance by the military is part tragedy, part farce. I covered a little of that history here:
[T]hroughout the 20th Century, in periods of domestic unrest and foreign conflict, army surveillance ratcheted up again, most notably in the 1960s. During that tumultuous decade, President Johnson repeatedly called on federal troops to quell riots and restore order. To better perform that task, Army intelligence operatives began compiling thousands of dossiers on citizens, many of whom had committed no offense beyond protesting government policy. Reviewing the files, the Senate Judiciary Committee noted that "comments about the financial affairs, sex lives and psychiatric histories of persons unaffiliated with the armed forces appear throughout the various records systems." Justice William O. Douglas called army surveillance "a cancer in our body politic."
Check the Church Committee's report on "Improper Surveillance of United States Citizens by the Military" for more on the history we should be loath to repeat.