If you had rented this house from me I would have seen the inside of it while you were living there. Maybe only once, or maybe twice, but I would have seen it.
Look at your business arrangement (that's what renting is) from your landlord's point of view. For money, he allows someone else to live in his house. He has a vested interest in making sure that you aren't doing something illegal (like a meth factory), and that you are generally taking care of the place (that you don't have 24 cats on the property, that the garbage isn't two feet deep throughout the whole house, etc.). He isn't interested in a few piles of clutter or laundry. He doesn't care that you have a picture of the canal on your walls, he just wants the walls to be intact.
Appraisers look at the interior condition to get a better picture of value. Some things are worth more inside than others. A house with grand crown mouldings, granite counter tops, brazilian cherry flooring (or travertine flooring), etc., is worth more than laminate counter tops with linoleum flooring. The appraiser won't open closets (unless it's a walk in to gauge the size), they generally won't open the cabinets, but they will take pictures. They will want a picture of every room (if they are any good).
It isn't a way to spy on you.
If they wanted to see the inside, all they have to do is give you 24 hours notice for a landlord inspection and you'd have to let him in. The fact that he has never done this is amazing (and foolish on his part).