The most important thing FB can do is win universal login. And the #1 thing it can do to promote that is restore some faith in its privacy commitment. This is a very smart move. Of course let's see how they implement it. If the process is too complex, it won't work for users
Facebook have got the 'Microsoft problem'. Microsoft is 'hated' by many people, especially in the tech community, because of their historical actions, even if many of their actions today are positive.
Facebook suffers the same fate. Anyone who has left Facebook over privacy concerns is unlikely to trust Facebook again.
Once bitten twice shy. Leopard doesn't change it's spots, etc
Quite true. There's still a shot for someone else to "win" universal login. But it's nearly impossible without tremendous scale.
I think people solve universal login without any service fairly successfully. They use the same email as account name and the same password on every service. There is really no need to have some external provider that manages "universal login" however convenient this might be for advertising and marketing purposes.