I don't think kmfrk is saying that the warnings are unjustified, more that they're just not getting through due to oversaturation. People hear about privacy issues all the time, but rarely see or experience actual negative repercussions, so they begin to tune out the warnings. Apps like this are excellent demonstrations of the hazards of tossing out personal information willy-nilly, and are thus more likely to actually get the message across to people.

Exactly. First the warnings didn't work, and now people are desensitized to the debate, so an alternative to just telling people is necessary.

Warning people is more preventative than showing people what they've already got themselves into.