I would look towards the trajectory of Path, and the fate of app.net for your evidence of the preferences of end users vis-a-vis paying a premium for privacy and security relative to free alternatives that make no such claims (Facebook and Twitter, respectively).
Please don't assume that a lock-in based on network effects must mean users are happy with (or even aware of) that trade. I don't like FB's practices, or the way LinkedIn deals with me, yet I maintain profiles on both sites.
Twitter was unambiguously non-private from the start so there were no broken expectations.
