This isn't merely "compartmentalizing their dalliances," it's compartmentalization of public vs private (or at least quasi-private) self.
I really don't think that's a fair assessment. Yes, people are comfortable living their lives in the open, and people do prefer convenience, but is that really because they don't care about privacy? Or is it more because we have all the abilities to do this?
If you grew up before that ability, did you really have all that privacy? Or did you only have it because of the lack of technology, and not by choice.
> the prevalence of porn games on Steam (which broadcasts what you're currently playing to friends and anyone who looks at your profile), and the popularity of porn tube sites
What does this has to do with privacy? Maybe the current generation is just more open about the fact that they look at porn, or play some porn game. It's really not a taboo subject anymore, we all know everyone does it, so why hide it?
Just look at the popularity of streaming models, "I know Facebook listens to my conversations but what can I do?" type conversations, the prevalence of porn games on Steam (which broadcasts what you're currently playing to friends and anyone who looks at your profile), and the popularity of porn tube sites