Google Plus's Circles System May Not be Sustainable

I noticed I started treating circles like iTunes playlists - I have a master "All Friends" (akin to my Music Library) circle, which is a dump for everyone who are friends (not family), then "RL Friends" and "Internet Friends".

Thinking about it, I can dump the All Friends circle because its a catch-all, and if I wanted to post something to all my friends, I can just add RL Friends and Internet Friends. There are certainly places I want to have people in multiple circles (interest groups, etc) but catch-alls aren't it.

Nested Circles seem like catch-all meta-groupings that create a more rigid structure (unless you could add a circle to more than one Circle Group, but this seems to be over-thinking the problem and could present an unwieldily UI).

For Smart Circles, they use the example of a work relationship changing. It seems that renaming that circle to something else would work just as well, and creating a new Work circle with your new coworkers in it. Having G+ try and manage something that can be fluid and sometimes pretty arbitrary seems it could be messy and potentially embarrassing (someone ending up in a circle they shouldn't be in).