I guess it needs an option to enable / disable, but IMO it is more important to know that the nick has gone offline than to have large numbers of messages.
Privacy - there are no greater or lesser privacy issues than:
1. Sending private messages between you and nick - server knows that you sent them and indeed knows their content;
2. If you open a window but don't send any messages (just to get the notify) then that is no different to adding the user to notify.
But if you want to mitigate the privacy issues then that can be done by only adding to ISON etc. if at least one message has been sent or received in the query window (because the server already has a record that there has been communication - plus the content - so doing an ISON does not tell the server anything more than it already knows).