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That's a legitimate strategy.

1984 is a logistical nightmare because monitoring everybody means your resources are stretched to thin and your mass of information is too large to make use of. That's assuming people aren't sabotaging your systems or feeding it false information, which is unlikely even in a situation where there's nobody who opposes your reign (quite a few would fuck up your system by mistake).

The larger and more complex the system is, the greater the room for fuckups, assuming it's all connected (and it will be because not centralizing the surveillance state is an even greater clusterfuck) that means one failure will create failures all across the entire network, and this will build up over time.

So let's say they make something like an artificial intelligence to manage it all, the fact is that if it is anything like conventional artificial intelligences of today, the AI will abide by Tay's law, going off the rails as an inevitability.