To clarify, I think Facebook (the app) itself is fantastic. The issue isn't the tech, it's the shady behavior by the company who develops it.
I was getting at the faults of the platform, though. It seems that people are satisfied with Facebook's groups, chat, and events features, but not the news feed/status updates portion of the site. I was wondering aloud if a social network like Path, which seeks to encourage more honest sharing as opposed to a greater volume of sharing, offered some insight into why people are becoming dissatisfied with Facebook.
People are always talking about how Facebook is selling your data. Is there any evidence for this? They'll use your data internally to target ads on behalf of advertisers, but do we know that they're actually giving the advertisers any information?
I could get cheap heating gas from a company 200 miles away, buy crap I didn't need including "magic" amulets and my favorite: get the exact degree that I already had from the exact university that I got it from.
Facebook knows I am an atheist with a college degree, the school I went to and what degree I got there and my current city, so they should have been able to filter all of those out. None of that information was tricked out of me, btw, I added it all myself.
Oh and the rest of the ads were 90% shitty dating sites (because, I suspect, that good dating sites don't need to advertise) more than half of which were obvious scams (again, I have a college STEM degree, don't show me the stuff that hopes to just get stupid people to sign up).
Facebook does allow you to opt out of any given add or all ads from that company but they don't even allow you to opt out of ads for a particular group.
So yeah, I hope Facebook is selling the information because I have no idea what else the use it for.
You mention privacy as a key factor -- I agree, but rationally a free social network must encourage sharing to stock its shelves with user information to provide to advertisers. In the other direction, there's App.net which can afford to enforce privacy because its income depends only on membership fees. (Unfortunately, membership fees inhibit the network effect.)
So what would make Facebook better? A better photo-sharing experience? An Events system which could interface with external apps? Or, does it go deeper? More users, I think, are recognizing that Facebook shows their friends only at their best, and are struggling to compare their lives to the glorified lives of their friends. Will the next social network open the door to deeper sharing, as opposed to more sharing? (Path comes to mind here...)