I agree with your overall theory but not with your conclusion. I think Facebook is making two big mistakes... 1. Thinking that everyone agrees that privacy i

I agree with your overall theory but not with your conclusion. I think Facebook is making two big mistakes... 1. Thinking that everyone agrees that privacy is dead 2. Still having not found a way to allow users to separate groups in an effective way (e.g. it's now possible to keep Mom from seeing those party pics but it still isn't easy) I think developers are afraid of Facebooks dominance right now and think it's a waste of money to challenge them which is why you don't see anyone trying to exploit those flaws. But they do exist and Facebooks seen (and largely ignored) the backlash to prove it.