Because, in the end, it actually doesn't. The put in the privacy features that allow people to decide for themselves what gets broadcast, but a lot of people never even bothered changing them. I have to say that I find it to be one of the most engaging features on any social site.
In fact, yesterday, I was at a Fordham Young Alumni Committee meeting, and someone mentioned this girl that two of us knew. I couldn't help but add, "And it was her 25th birthday" and someone else said, "Yeah, I'm sorry I missed that...it looked like fun." Everyone else was a little confused, but what the two of us realized was that both of us had seen separate friends of ours tagged in photos from the part in our Facebook Newsfeeds that day.
What the Newsfeed does is to keep oiling the social gears in the machine. I have no doubt that it causes more comments, more messages, and more importantly, more offline interaction. That's something a lot of other networks are missing. I'm signed up to about a dozen other networks at least. Friendster I hear from once a week with similar updates on friends, but my friends just aren't that active anymore there. Once in a blue moon I get a Tagworld invite. And the flurry of Kaneva friend requests? They've dropped off the table...not sure why.
Keeping people engaged is so critical to a social network, and what Facebook does best is to put keepping people engaged with each other over keeping people engaged with the site. For example, they just sliced an extra (advertising supported) pageview off the poke. When you poke, you get a quick java popup, not a full page refresh or new page to confirm. Slick, easy, faster. Another good example is how they show me my friend data. They actually tell me who my friends just became friends with. Friendster, on the other hand, makes me click through to my friend's friends to discover that on my own, and see another ad.
The Newsfeed has also started to feature sponsored items and I really don't find them intrusive at all. If I'm not interested in them, unlike email, they disappear down the page.
So, despite the weeping of tears and beating of the breast, I think the Newsfeed turned out pretty well, actually. It's definatlely keeping me more engaged with my friends and the site, too.