As far as I know, just because a site-admin hides a module, e.g. Sounds, from being displayed in the menu system, or even accessed in anyway (with Page Access Control module), that does not make the module inactive. I know, I've tried to remove anything to do with the Sounds module with very limited success. I believe the only way to make a module inactive is to uninstall it... which is impossible for some modules, like Sounds, when other modules are "dependent" on it.
All that said... I agree with you... meaning there should be a default set of tools to both completely hide/disable a module and, at the same time, hide/disable the Privacy Settings associated with it. Furthermore, when a module is completely hidden/disabled (i.e. denied access to everyone)... all other modules should no longer provide methods to access the disabled module. By this I mean all the modules that provide a method to add/link to, for example, the Sounds module would no longer display that method.