To be clear: even if it costs half your conversion rate, it may be valuable, at least until you grow in size to the point where having some support staff on hand is a non-issue, to force people to use a "well known" login provider. The users who insist on per-site accounts very well may just not make enough revenue to hire the support staff required to maintain them.
(Also, I think the privacy issues are seriously underrated: users often seem to insist that you should be willing to trust From: headers on email messages and that looking someone up by real name should be a common/valid way of finding people... I'd much rather Facebook, Google, Yahoo!, whomever, has to think about those issues rather than me.)
Edit: (typed on my iPhone, already fixed a typo)