You missed the point. The FAA will allow government surveillance but not criminal orgs.

The GP talked about people entering the surveillance game in general, not necessarily operating their own blimps. Smaller outfits will find ways to game the existing rules and add surveillance capability thereto.

the cameras are all made by Huawei, so they probably get a live feed anyway :)

Ha, shades of The Thing https://en.wikipedia.org/wiki/The_Thing_(listening_device)

But they will likely step in for companies and criminal gangs. This limits to the Government.

FAA wields enormous (usually dictatorial) powers in things that refer to safe flight and will easily trump Pentagon there. It would not lift a finger on privacy, but will likely enforce that all such balloons carry transponders. This is not a consolation here, but just a note that in its fiefdom FAA will win.

The pentagon has free reign to pretty much define any TFR and the FAA just has to accept it.

Can you provide some examples? I think FAA is usually involved at all stages and should those planned TFR be a pain safety-wise (e.g. encroach on a landing pattern), Pentagon is told to come back with a better plan.

Those two organizations work together all the time and know what works, so such conflicts are rare, but in a direct confrontation I think FAA easily wins.