If I were involved in this (and I'm not, I just think transparency - not privacy - matters) I would want the CEO and CTO of Path to create a video that is displayed to all relevant users in their mobile app. The first thing they do is apologise, they explain in plain words what people are up in arms about, the CTO reiterates that a) this was dumb and a poor choice but we are all human, b) what this means (eg: we did this not for our value but to deliver the best experience by matching you to your friends effortlessly) and c) why this matters on a macro scale for the industry.

I would respect a company that did this because they are not only addressing users that are aware of it but also users that are not aware (but are affected.)

Wiping data is fine but it feels like it doesn't solve the crux of this problem -- communication and transparency. Companies make mistakes and they can fix them, sure, but communicating about them? that's much cooler. (I suspect this is overkill unless mainstream news catches on this - which seems unlikely)