The big brouhaha has been about whether Facebook had violated some ethical rules regarding conducting psychological experiments. There's a very nice discussion here about this aspect of the issue.
However, from my perspective, everyone is missing the real point. Facebook violated its social contract with its subscribers. When we sign up for Facebook, it's understood that Facebook will use our data in managing and optimizing its relationship with advertisers. That's how Facebook makes revenue for itself. We sign up knowing this, in exchange for free services to communicate our thoughts and feelings to others; friends, family, the world, depending on our security settings. However, we have an expectation, and a reasonable one, that Facebook will present that representation of ourselves faithfully. In other words, what I post is what others see.
Facebook violated that trust. Their experiment involved un-faithfully representing people's presentation of themselves to their friends, family and the world. In other words, I can no longer trust that Facebook will faithfully and truthfully present my representation of myself.
In this case, Facebook simply "removed" some posts that other viewed. Imagine: I go to my Facebook page, and see every post I've made. However, someone else going to my page sees a different set of posts. That's not good. I can no longer trust that my friends are viewing everything I want them to see.
But it gets worse. Now that Facebook has shown it is willing to "hide" some posts, what's to stop them from experimenting and "adding" some posts? First, it might be posts about products. Let's say I click on a particular ad when I visit my own page three times in a row. Facebook could easily "add" a post such as, "I'm really interested in this product! I'm thinking of buying it!" with an embedded link to the product page. That might lead my friends to click on it as well. Facebook could easily "hide" this post from me when I visit my own page. And hide any responses from friends to this made-up post. Suppose I'm applying for a new job. And Facebook has "chosen" my account as one of the "subjects" to which posts will be added and viewed by others than me. I might not get that job because my potential employer saw something they didn't like, THAT I NEVER POSTED AND I NEVER SAW!
Later, it could be posts about something else; politics, religion; anything. And what's to stop them? Nothing, really.
They've already demonstrated a willingness to mess with your page and what other people see on it. And they whole-heartedly did NOT apologize. They merely stated that they had poorly communicated what they had done.
Think of it this way. You're married. Your spouse, for unknown reasons, and unbeknownst to you, starts telling stories about you: he's cheating on me; he hits me; he molests the children. All of a sudden you're friends start treating you differently than they have in the past. Perhaps the police start investigating you. Finally, you find out what your spouse has done. And what does your spouse do? Doesn't apologize, just says "Well, I guess I could have communicated it to you in a better fashion..."
Would you ever trust that spouse again?
I no longer trust Facebook ...