The inference is that often people are unaware that a network such as "Los Angeles" has millions of users and thus are inadvertently sharing their private data with strangers. Frankly, I call bullshit.

If Facebook was serious about my privacy they would a) Create a single page for security instead of the current maze of pages, b) Change the defaults for new content to just "Friends" and not "Friends of friends", c) Make it far easier to find how to remove yourself from Friends/Fans/Groups than it currently is.

Apart from a), which has been mentioned before but never materialized, you won't see these happening because they go against the interests of Facebook, and Facebook seems quite fearless when it comes to upsetting their users.