I believe that the benefits of a social network such as Facebook outweigh the risks. The problem is that, it is very hard to quantify the positive effect which arises from small interactions. Sure there is huge scope for improvement, but one could have made similar arguments against telephony when it was invented.
I believe we are still to see rise of real social network based applications. e.g. something that allows us to estimate trust for a person, given his and your social network.
On the other hand you don't know shit about the risk. If the US government takes a totalitarian turn, and they start taking away your friends and family under the guise of homeland security then Facebook suddenly becomes your worse nightmare. And don't get me started on Color: Wilhelm Zaisser's corpse is busting a nut about that 50 years posthumous.
I believe we are still to see rise of real social network based applications. e.g. something that allows us to estimate trust for a person, given his and your social network.