This is straight up false. It was scrapers extracting data from public profiles. They already incorporate anti-scraping techniques, so there's not much they can do other than require every one to set their profile to private.

If they want to position themselves as the global phonebook, that's fine, but they should be open about that.

Edit to add: If you aren't in the "gather and sell access to everybody's data" business, "private" is a sensible default setting for that information. On the other hand, if you're Facebook...

Phonebook... Facebook...