I disagree with everyone else on this. Everything here except the copyright thing seems pretty reasonable, from their point of view.
I would simply push back a bit on the copyright issue. Explain that they have printing and reproduction rights for personal purposes in perpetuity, but that you retain copyright of the photos. Seems fair to agree to additional privacy measures if they are concerned about being submitted to blogs and magazines, but it doesn\'t mean they own the copyright.
Conversely, you could quote them an additional fee to buy the copyright.
Either way, this doesn\'t sound so harsh to me. Did they seem reasonable in person? Then they probably will be fine as clients. I think they\'re just trying to make sure they don\'t get burned. And if the guy is a lawyer, then that explains the nitpicking. It is perfectly normal in big business transactions for each party to rework the contract. It\'s a negotiation, not a deal-breaker.