Sure there are generational differences in our expectations of privacy and Facebook has succeeded in stretching the line, sometimes to the breaking point, triggering protests by users. Most of us want to keep at least a few things private.
Even if you’re not concerned about an update that says “John just watched Megan Makes it with Midgets!” you may not want your more sophisticated friends to see you’re reading up on the Kardashian divorce. And if you can get past both of those, how much junk do you want to see just because you “Liked” a page to get in on some promotion? Yes, you can go back and unlike things but constantly tweaking settings is confusing for some and a time suck that, unlike others, doesn’t provide any fun at all.
Robert Scoble expounds on what he calls the “freaky line” of Facebook. http://scobleizer.com/2011/11/20/the-facebook-freaky-line/