It's a widespread perception among the generations peering down at the millenials that the kids don't care about privacy like we all used to. There's something about the perceived narcissism and voyeurism of posting photos all over the Internet that makes some people cringe.
But then along the Chief Technology Officer for Facebook, Bret Taylor. He told an audience at Web2 that "The majority of people on Facebook have modified their privacy settings." And he specifically highlighted younger, more active users as those who are most savvy about which people can see what on their profiles.
I think we can see this as a positive development. Facebook has provided better privacy controls and now more people use them. Not only that, but the longer people are on social media, the better they become at it. "Better," in this case at least, means sharing stuff with the people you want to without sharing it with the people you don't. I'd be shocked if we didn't see across the board improvements in people's ability to manage their information, as long as Facebook, Twitter, Tumblr, and other social networks continue to provide them with the ability to control their profiles in easy-to-understand ways.