This website reminds me of being outside, with people, and hearing little snippets of conversations from strangers. Nobody goes to a park and then complains the council that strangers where able to hear their conversations.
Hmmm, I hope this doesn't sound facetious. I feel like I'm missing the point with the facebook privacy hype. There are so many reactions that seem totally strange from my perspective that I feel like I've got something wrong.
The way it sits in my mind is:
Facebook is a service provided for free.
I've given facebook some information about myself so that it can be displayed to people who are interested.
My friends do the same and so we can communicate and share things such as photos.
Some people start to get angry at the fact facebook doesn't do what they want, namely provide this service in a private manner.
I have yet to see anyone personally upset by this. Mostly people seem to disagree with the principle, and go and get angry on behalf of others.
They do not do a good job of indicating how public an action will be. This is true across the internet, but it's a real problem on Facebook due to the strong ties to your real identity there.
Edit: The brunt of the matter however is this: if a few people are using your system wrong, it's their problem. If a large percentage of your users are getting it wrong, it's your problem.