This particular issue may not be of concern to people handling classified information if the policy in use prohibits mobiles/own devices. However, that doesn't make the concerns any less valid for regular business, government and individuals when the issue is apps/privacy leaks in general and not just this one specific instance.
There's a lot of highly valuable information that can cause a lot of damage on an individual or even national level that isn't classified and would be found used on mobiles. The data may be confidential enough that devices are required to be encrypted to safeguard against loss/theft, but when the apps running on the device itself are pinching the data, it's a problem.
You could argue that people shouldn't download/install apps they don't trust, but that's not really feasible for anyone that wants to actually use their phone. Especially when you consider the "trusted" companies can just as likely be the ones responsible due to the money gains targetted ads bring. There's nothing to say pre-installed apps arn't also up to no good (in terms of privacy leaking, rather than maliciousness)
Re android and the permissions. I agree most don't care/take notice of the warnings, but that's their choice. If I downloaded an app that was only supposed to be used to read content on my device and it wants location/phone/internet access, I'd question why, google it and see if anyone knows what it wants to do. Whether that would turn up useful information is a different matter
That wouldn't have helped in the case of the linked in app though, as you know it needs net access and will check contacts etc in many cases, desired behaviour, but there's no way to know that the data they're sending encompasses more than you're willing to give.
Not sure how that problem can be tackled, there's not really anything that can be done on an OS level, which leaves it up to the platform holders to require a public disclosure of what info is accessed/used/transmitted and a promise to ban any developers who go beyond that that. A burden I'm sure apple don't want and there's going to be the fine line between honest mistakes where apps pull more than needed and claiming it's a mistake when it was really intended.
If I know exactly what data is accessed/transmitte, it's then up to me to decide whether I care enough to look it up and decide to use that app based on that. Majority of people probably won't care, that's fine. Busiesses though could vet (legit) apps that are deemed to access too much information or details they don't want to share.
It won't stop malicious apps that lie deliberatly then try to steal info, but that's not the goal, it's to stop legit apps accessing data that they deem is fine where as the users sometimes deem that as not acceptable. For example, this whole linked in mess, wouldn't have occurred had linkedin declared up front what data their apps transmit back to their servers and the reasons. People could decide to trust linkedin to delete the data as they claim to do, or decide not to use the app. They could make an _informed_ decision.