I've seen a ton of blackmail!
Once upon a time, I worked as a fraud analyst for Google's ad network. There was this recurring problem with Japanese freeblogging platforms like hatena.blog etc that syndicated ads from big G. Yakuza would make a ton of blogs full of porno stills, with fake links to the "full movie." When users clicked the link, they'd be dumped on a page saying something along the lines of: we know your IP address, we know approximately where you live (because GeoIP, duh), send money to such-and-such or we tell your boss and wife that you're watching porn! (If you don't, nothing bad happens, because of course the only thing they've got is your IP.) It was a variety of one-click scam.
I think you have incorrect assumptions in two places:
There actually isn't that much dirt lying around that's both cheap to unearth and cheap to exploit. (To scale blackmail, the yaks need make their own dirt. Not to say they don't run more targeted, high value operations too!)
And, if you do have dirt, you don't threaten to publicize it generally; you threaten to deliver it directly to where it does the most damage. (The yaks say they'll tell your boss and wife, not list your name on YouGotBlackmailed.co.jp.)
There actually isn't that much dirt lying around that's both cheap to unearth and cheap to exploit.
It seems like any hacker to compromise a large set of personal computers could manage this. Would've been a bit trickier in the old days, since you'd have to automate the process of finding 'secret folders' on peoples' machines with a set of hard-coded rules. Getting someone to download a "video", then grabbing everything near it, or hijacking a webcam and having some early image classification system build up a cache of compromising pictures of someone, seem tractable.
Indeed, I remember a famous instance in which a pornographic video game published a list of the desktop account names of people who pirated it. I would be surprised if someone hadn't, in the early internet, hosted a virus disguised as a video of a particularly reviled fetish being acted out, grabbed the contact lists of users who downloaded it, recorded from their webcams while the video was open, and threatened to expose them if not paid off.
Does it count as blackmail if the underlying allegation is completely made-up? For instance, there's the political dirty trick of sending spam SMS to likely opposition voters, saying things like, "You are illegally registered to vote! If you try to vote, you will go to prison and your kids will go to some terrible foster home and be abused. Keep your kids safe: don't vote!"
It is interesting how little blackmail I see, that I know is blackmail. A lot of people probably do some things they would be embarrassed by if they were made public at some degree of detail and explicitness, and it probably isn’t that hard to get evidence of these, and quite a few people seem to be amoral . Also, in order to properly embarrass someone, I imagine you would make your information relatively public, so that for instance I—Katja—should hear about some fraction of cases. Yet I very rarely receive information I know to be public for the purpose of embarrassing someone. I’m not sure I remember it ever happening. Why not?
If I imagine being morally inclined toward blackmailing someone, one salient reason to avoid it is that my wrongdoing is extremely obvious and in-the-face of the recipient, so they seem likely to react destructively, for instance by telling everyone that I’m a dirty blackmailer. It’s like stealing from right in front of someone’s face.
Another possibility is that there is a lot of blackmail, but it mostly remains private because the blackmailers mostly get the price right to have their threats heeded. This is an interesting theory, because it suggests blackmail is much more common than we observe, so people may be greatly underestimating the chance of it happening to them.
One place I have heard about blackmail occurring is from AI systems. Which is interesting, if it isn’t a thing humans seem to be doing much. What to make of that?