I'd like to have been in the room when that discussion took place.
I personally doubt that I would have cared much for the announcement outside of any interesting context.
Edit: Granted, they relaunched it as a social gaming site, so that signup method makes a bit more sense.
For a second, I thought you were asking if your company's policy was a joke.
Spoiler alert: yes, but it's not funny.
Sadly implemented dumbly; why on earth would I give them offline access to my Facebook account? Or, rather, I understand why, but don't understand why they won't let users try the service first, and then show them what they're missing out on by not granting offline access. Bizarre.
Fact of the matter is that install rates often don't change much when you ask for additional permissions. Most users don't care. There's often no compelling reason to build out complicated permissions flows when the standard "ask for it all up front" works just fine.
Would the site be more successful if they'd chosen a different domain name?
Without a "farmville" styled killer app, Friendster isn't going very far.