So here's the thing about Facebook (which I left some time ago).
It's 2010. All information is viral. Not in the good way, "This will catch on fast! Alternate reality games! Memes in the misinterpreted sense!", in a "contagious infection that you can't stop from spreading" way.
Let's say I make a profile for myself online and I choose to share its most sordid details only with my very closest friends. Firstly, my closest friends are distinct people. They have their own rights, profiles and security settings. They can share anything they wish with anybody they wish. Even if they choose to only share the data with their closest friends, this is not an idempotent operation. Applied sufficiently many times, everybody is a closest friend of a closest friend of [...] a closest friend of everybody else who uses Facebook or not, including my friends, mother, shareholders, boss and wife. In addition, there is the company who hosts my profile. Do they have the right to share my data? Well, I gave it to them voluntarily. And I click "Yes" every time their EULA changes.
What else are they going to do with it? Hosting and accumulating data is all Facebook does.
Facebook is not a charity. Why does it host ridiculous polls and let you say "I Like It"? Why does it track your personal information and shopping habits and responses to advertisements and potentially every other action you take? Because the accumulation and sale of demographic data - about YOU, its users - is its primary business model. Maybe there were a few noble idealistic months at the beginning of the site's existence when it truly was there to make people happy and nothing else, but now it has hosting costs beyond your wildest nightmares, which must be covered somehow. This - user data, and advertising targeted with pinpoint accuracy - was always the only way that the site was ever going to turn a profit. To assume otherwise is naïve, and to think that an open-source alternative will solve this problem doubly so.
It is not practical - in fact, it's practically oxymoronic - for a social networking site to keep data private, and it is dishonest for a social networking site to pretend that it can keep your data private while continuing to cover operating costs. Zuckerberg made remarks some months ago about wishing Facebook had never had privacy controls, and was lambasted for it. I'm dubious of his motives, but I call his conclusions pragmatic and justifiable. Dear user: Keep your information to yourself, or share it with the entire listening universe, corporations included. There is no longer a middle ground. This is not a relaxation of privacy controls. This is an increasingly bare-faced confession of underlying principles. We're in a world where personal information is free-as-in-speech but valuable-as-in-beer.
Social networking has been like this since it began, and it will be like this until long after you die. This Is The Way The World Is Going To Work Now. The more plain the sites' intentions are, and the more consumers understand about how the net is going to work going forward, the better. Knowing this is good for you. You may decide this is fine, and that's fine, or not, and that's fine too. The important thing is that your decision is informed.