Via NY Times:
“I like Foursquare because I can actually pick who sees where I actually am, compared to Facebook, where I have 1,200 friends,” she said. “I don’t want 1,200 people knowing where I am.” Facebook does let users pick a smaller subgroup of friends who can see location updates, but Ms. Lovelidge said it would be too much trouble to set that up.
Emphasis mine. This isn’t lost on Facebook. Zuckerberg himself said: “But guess what? Nobody wants to make lists”.
The problem is that for every Ms. Lovelidge who at least acknowledges the risk and avoids it, there will be 10 others completely oblivious to the risks.
One great lesson here is that you can’t change the paradigm and assume an old security model, in this case the “friends” network will continue to work. This is the equivalent to turning a store into a private residence without bothering to replace the open store front with a more traditional door.