I'll use myself for example. I'm not particularly prone to sharing or to envy (at least, that's what I thought). I rarely posted anything to Facebook, and when I did, it was science or news related. I even felt violated when others posted pictures of me. However, after about two years worth of Facebook use, mostly lurking, I was surprised to find that I was angry with just about all of my "friends." It seemed they were so much happier than me, wittier, more liked, more photogenic. Their families seemed so perfect, while mine was in smoldering ruins due to tragedy, divorce, and bitter grudges. Their posts got loads of likes and comments, while mine received few or none. They also seemed, well, so dumb: they wrote "are" for "our" and mixed up "they're," "their," "and "there." And they broadcast inane political rants, which, turns out, is a great way to ensure that I'll never want to hang out with them again.
So, in turn, for me at least, I found it had affected me negatively, so I quit using Facebook, and I think it made me much happier and a better friend. I stopped placing expectations upon my life by what I had seen on Facebook. And, most of all, I was shocked to discover how judgmental I had been toward these people. I'm the guy who is often jokingly referred to as the family shrink. Everyone comes to me with problems because I'm patient, I listen, and I don't judge. Well, on Facebook, I was a different person. I was brutal. And that attitude alienated me because I found that I couldn't like people in real life whom I couldn't respect in digital life, whether it be due to my own selfishness or their poor grammar. Perhaps that's why I rarely posted—I felt that I would be judged just as I had judged them, and I feared rejection.
Now when I talk to my friends, they seemed shocked that they have to fill me in on things that have been thoroughly covered on Facebook. But when we do talk, it isn't infused with the expectation to please. I can be honest, and so can they, and there's no need to feel like we're having a loud conversation while sitting at the center table in a crowded restaurant.
I don't think this applies to everyone. I have a friend who doesn't seem the least bit bothered by this. Maybe I'm emotionally weak, or overly sensitive, or more prone to envy than I would like to think. And I don't condemn Facebook entirely. Like you said, I think we're still working this whole thing out, and we have yet to figure out how to positively integrate it into our lives. Even so, I think for some people, no amount of sharing is good, not if we're only sharing the good bits.