[XorNot]

The problem is culturally people treat a camera lens like an eye, and studies show that merely seeing a picture of an eye or a camera causes people to act like they're being surveilled (signs with eyes on them and a message are obeyed more often).

So you're always going to have a problem pointing a lens at someone, no matter what indicators are there.

I suspect the innovation needed here is mechanical - Google should try adding a mechanically driven shutter to the camera, so when it's off, the lens is covered. I would bet strongly that that would solve 95% of people's problem with Google Glass.