It is irrelevant whether or not a camera could be mounted in a microwave; The claim under dispute is whether a remote hacker could turn your microwave into a camera, and clearly this is not possible.
The problem here is that Kellyanne Conway is representative of the rise to power of the ignorant moron. In case you hadn't noticed, ignorant morons have become more and more influential in recent years; They were always a majority, but until recently the elites have been able to keep them in their place, by creating an environment wherein ability, expertise, and knowledge were given respect.
All that has gone; The ignorant morons are now taught not only that expertise and knowledge are not worthy of respect; but also that their own opinions are valuable - that everyone's opinions are valuable (and therefore equally worthy of our attention).
Now, given that we live in a highly technological age, this causes a number of issues; and Conway's assertion is emblematic of these issues - In the world of the ignorant moron, technology is indistinguishable from magic. The ability to wield that quasi-magical power imbued experts and the holders of knowledge with awe and respect; And the ignorant morons assumed that these magi could, if they chose, do anything at all. Getting a microwave to heat up a cold slice of pizza is magic; Getting the same microwave to take photos and transmit them to Obama's secret bunker is equally magic. So both are equally plausible.
What has changed is not that stupid people now think that microwave ovens can be used to spy on them; It is that people who hold such moronic, ignorant, uneducated, and downright stupid beliefs are now allowed to hold positions of authority, responsibility and power; and to make decisions that affect everybody.
This seems to be a worldwide phenomenon, and I suspect that the Internet is responsible - never before were ignorant morons able to find a community of like-minded ignoramuses so readily.
Brexit, the election of Trump, and the rise of the small-minded nationalist worldwide are all symptoms of this; The supporters of these terrifying events are overwhelmingly drawn from the ranks of the ignorant and uneducated, and they cannot be reasoned with, as they do not value reason. They are numerous, and they accept no authority other than pure democracy, so they cannot accept reality unless it is agreed to by the masses - and the masses are incapable of grasping the realities of a modern society.
They are simple people, and they demand simple answers; And they WILL NOT accept the merest hint that the questions and their answers are anything other than simple; To suggest that complexity exists is to lay claim to the value of expert opinion over the massed opinions of the morons. And that is elitism, and cannot be allowed.
The ignorant masses really are the salt of the Earth - hard, square, and bad for your health. Most everyday technology no longer requires expertise to operate it; and until the morons have broken society to the point where the value of experts once again becomes so obvious that even they can see it, they will not be persuaded that knowledge and expertise are valuable.
We have impressed upon people that they are allowed to think for themselves; But we have failed to teach them how to think (for fear of upsetting those who do not wish to think; and for fear of the dangers of teaching people what to think), and this is the result. They want to be led, but are wary of being misled; So they follow people who are prepared to tell them what they want to hear, and refuse to follow anyone who dares to contradict their conspiracist nonsense. The only way to gain power in this environment is to be utterly unscrupulous - and so no person with scruples can come to power, and we are led by crooks and idiots, while they are cheered in their efforts by the great mass of ignoramuses who are too stupid to see that ignoring the advice of the knowledgeable is a recipe for disaster.
We are witnessing the Dunning-Kruger effect on a planetary scale. It remains to be seen whether our civilization will survive it.
