It knows that I signed into your site. That's one too many things I want facebook to know - it's not their business. So I'd say yes- subjectively, I would not

It knows that I signed into your site. That's one too many things I want facebook to know - it's not their business. So I'd say yes- subjectively, I would not sign up for any site that required me to use my facebook credentials logged in. I also tend to avoid sites that try to lure me into this option even if others are available. I like my accounts separate. They are records that can be subpoena'd and data mined, and correlated, to show that I was on your site, and then, over to facebook, they can find out a whole lot MORE about me - so yeah, I'd say it would scare away a lot of people (at least in this crowd) OTOH - it might be wildly successful if your target audience is the regular sheeple :)