I think what made facebook appealing in the beginning was the "post an update, get an immediate reaction" phenomenon. The number of posts was small enough and the number of friendly eyes high enough that the probability of even the smallest discourse was high. Add to that the fact that one's list of "friends" starts relatively small and encompasses a higher ratio of people who are actual friends. Over time, one's list of "friends" expands to the point where a user's feed is comprised of non-relevant information. For me at least, it lessens the desire to contribute content knowing that that content will be diluted in the huge sea of updates. The same holds true for reading my news feed; I don't want to comb through lots of posts to find a few that are interesting.

Note: I write this post from my own experience as a college student. It may very well be different from how others use facebook.