And people keep trying. One aspect that seems to never get brought up is divorced families. Many may not want people on one side of the family or the other to be seeing certain pics or talking to others. Having statuses read by person X mentioning person Y may not be the best thing to do.
So... introduce privacy controls? It's confusing enough for most people just to enforce a couple of rules. Trying to codify the weird world of divorce families' feelings in to a web interface will be problematic. Sure, people can just 'get over it' and 'grow up', or they can be told to, but it's not always so easy.