A few days later I was reading one of Jacques Lacan's seminars and I stumbled on something really interesting. In this seminar Lacan - before Foucault made it popular, incidentally - said a few brief things about Jeremy Bentham and his theory of fictions. (Its here, turn to pages 11 & 12... if you have a supple neck, that is: http://www.scribd.com/doc/7102137/Lacan-Seminar-7-the-Ethics-of-Psychoanalysis).
What Lacan's saying is that Bentham's fictions and consequently Foucault's "Panoptic Gaze" is basically what Lacan calls the "Symbolic". This has to be taken in two senses: Firstly, it means something like the implicit rules regulating society and mediating between various individuals. This encompasses everything from the "Law" in contemporary society to the myth structures which organise primitive societies. Something like the "moral structures" that Durkheim talks about. Secondly, this concept refers to the Freudian unconscious which Lacan believes can only be influenced under conditions of sufficient social integration. These two meanings are, of course, dialectically related.
Anyways, I mentioned a while ago in a different context that the extreme manifestations of violence we see today (school shootings etc.) was due to extreme social anomie and that I believed that this could be related to the crisis in psychotherapy today - which Foucault, to bring him into the fold once more, claimed (and I largely agree) was essentially a mechanism to re-integrate individuals into society. All of this was, I won't say nice, but it certainly fit nicely. My point is that Foucault's conception of society is not that relevant today. On the one hand "disciplining" mechanisms have become extremely vulgar, not even bothering to hide behind moralism, while at the same time a violence bubbles beneath the surface ready to erupt at any time - the modern prison exemplifying this. On the other we have a society of people who prove extremely resistant to psychotherapy and a breakdown of proper psychiatric facilities. This again leads to what psychoanalysts refer to as people "acting out" in their day-to-day lives which is... you guessed it: a form of social violence ( http://en.wikipedia.org/wiki/Acting_out).
It looks like Foucault's conception of society as merely a summation of pure power relations has come true. Fun times, he should be proud!