Do you read End User License Agreements or Terms of Service when you sign up for a new online service? I don't. What is the point in reading beyond the "reserves the right to change this agreement from time to time" part. That's right, we click that we agree, and then the agreement changes.
This is a particularly acute problem when it comes to free services where all we are giving up is our privacy information. If we pay for a service, we have a fighting chance to argue that the payment was made based on the agreement and that it cannot change "materially". But when the service is free -- the sky is the limit on the changes.
So what happens? We generally skip the reading and expect the worst from the vendors. Facebook's recent moves have not helped reverse this trend.
As new services are dreamed up, and companies created around them, the realm of possibilities is limited by the lack of trust we have in the system owners. In response to this situation some people have proclaimed privacy dead. I think it is the other way around: trust is dead.