Re: I apologize for being ignorant in this...
The short answer is
The mass dump of personal data is what is illegal.
Like you say there is nothing illegal about turning up at your local council office armed with a paper notebook and pen, and asking to see public records then making notes. If however you turned up at the council offices armed with a 1000 page per minute high volume copier, expect not to get through the door.
At the moment there is a fine line drawn between reasonable access to public records, and massive data collection. I expect things will start to get messy once the GDPR comes into play. Most councils will probably err on the side of caution, until someone has to sue them to get access to public data.