My guess is that one of the drivers is to beef up their ad platform. It's hard to make $$$ selling local ads if you don't know where the user is located.
Would you tell Facebook where you are right now?
Normal people would, but not people who -- day in and day out -- read articles about privacy issues on Facebook.
Once the iPhone app starts invoking a "Facebook would like to use your current location" popup each time you launch, where "no" will prompt you again next time, but "yes" will remove the annoyance, a lot of people will choose the latter.
And then some people will uninstall it.
I believe the proper answer is, 'no chance in hell'. The second I do, I'll start getting bombarded by ads coming to my cell phone. Since my number is listed online, but i don't actually 'own' it.
Until Facebook negotiates plans with the cell phone providers that sneak apps onto your phone which relay your location to facebook even without your approval...