I think what Facebook should have done already is use one of their blue announcement boxes on the home page to notify users of their default "Everybody" status if they have it turned on and direct them to the privacy settings to adjust them.
Of course, I have everything set as openly as possible, so I really don't care anyways.
It's not the intention that you would interact with the slider frequently. If you drag it to a different setting a dialog box would popup and explain exactly what the consequences would be.
Most people would be happy with simple privacy settings, and there's still a customize link for the power user.
this goes a long way towards that for sure, but it's just not in fb's self interest.
I don't think they were a privacy control, just a (complex) way of mixing your newsfeed.