Marshall K. over at ReadWriteWeb gets it right regarding Facebook's move to make status updates and shared content publicly accessible by default: "This is not what Facebook users signed up for. It's not about privacy at all, it's about increasing traffic and the visibility of activity on the site."
Lots of people are saying that this is Facebook's response to the Twitter juggernaut, but my question is why does Facebook need a response to Twitter at all? In my mind the services are quite different, and at least for me fill quite different niches. Not to mention they have completely different revenue models (i.e., Facebook has one, and Twitter doesn't yet).
I use Twitter to follow and interact with the popular loudmouths in our culture. It's really not good for seeing what my friends are up to. On the other hand, Facebook is great for connecting with old friends and colleagues. But I'm never going to be Ashton Kutcher's friend on Facebook.
Simply put, Twitter is a public network and Facebook a private one. The executives at Facebook who decided to implement this policy change clearly do not understand their own product.