There was a much longer post here. i trimmed it down.
Suffice to say that "privacy" is about letting you control your personal information rather than someone else. That may sound obvious, but consider that "control" means both keeping people out as well as letting people in. If you don't provide that sort of control, people find you burdensome and will not use you, regardless of how secure or flexible you may be.
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You've described my core complaint and resultant disinterest with "friend"-based social networks, as well as my fear of all aggregations financial and… portal.