I hope that location-based service companies and other businesses that are developing business models around location are closely following the public's growing concerns with Facebook's privacy policies. According to reports, Facebook recently held an emergency meeting concerning its privacy issues. In addition, some reports suggest that it is losing customers due to privacy concerns.
Technology is improving so rapidly - and the business norm appears to be to bring those improvements to the market so quickly - that the general public is not able to keep up. Unfortunately, neither have the legal nor the policy systems. As a result, even though an application or business practice may be "legal", in that it does not - yet - violate any laws, it may not be "right" from a market standpoint. I believe this is particularly true when it comes to privacy and location as we are all struggling what privacy means to us from a location standpoint.