I mostly agree, but I think the slogan (like, I think, many others about which similar things could be said) has some value none the less.

A logically correct but uninspiring version would go like this:

It is a common human failing to pay too much attention to safety and not enough to liberty. As a result, we (individually and corporately) will often be tempted to give up liberty in the name of safety, and in many such cases this will be a really bad tradeoff. So don't do that.

-- Not Benjamin Franklin

Franklin's slogan serves as a sort of reminder that (1) there is a frequent temptation to "give up essential Liberty, to purchase a little temporary Safety" and (2) this is likely a bad idea. Indeed, the actual work of figuring out when the slogan is appropriate still needs to be done, but the reminder can still be useful. And (3) because it's a Famous Saying of a Famous Historical Figure, one can fairly safely draw attention to it and maybe even be taken seriously, even in times when the powers that be are trying to portray any refusal to be terrorized as unpatriotic.

Of course Volokh is aware of the "reminder" function (as he says: "The slogan might work as a reminder") but I think he undervalues it. (He says the "real difficulty" is deciding which tradeoffs to make, but actually just noticing that there's an important tradeoff being proposed is often a real difficulty.) And, alas, its Famous Saying nature is pretty important too.

It strikes me that the original Franklin quote really identifies a specific case of the availability heuristic. That is, when you're focused on safety, you tend to adopt policies that increase safety, without even considering other values such as liberty.

There may also be an issue of externalities here. This is really, really common in law enforcement. For example, consider civil asset forfeiture. It is an additional legal tool that enables police to catch and punish more criminals, more easily. That it also harms a lot of innocent people is simply not considered because their is no penalty to the police for doing so. All the cost is borne by people who are irrelevant to them.

The quote always annoyed me too. People bring it up for ANY infringement on liberty, often leaving off the words "Essential" and "Temporary", making a much stronger version of the quote (And of course, obviously wrong).

Tangentially, Sword of Good was my introduction to Yudkowsky, and by extension, LW.