You're still only talking about current technical limitations though. Cameras are getting better, the recognition is getting better, and the trend is for people to have more and more information publicly available online. Maybe it won't happen in 5 years, but I can't see how it won't happen relatively soon.
I think you're missing the fundamental limitation of this: the SSN identification.
Even if I give you the ability to go from picture to real name (which to many is still fairly jarring) given only "open" databases at 100% accuracy you still can't come near your 50% mark. The leap from real name and place of birth to SSN is the limiting factor, and the reason for this is the randomness inherent in the assignment of the last 4 digits of one's social security number. Given the ability to guess > 10% of that range (they have access to all SSNs who are deceased as well), the researchers could still get only 8% nationwide accuracy on recent SSNs.
You would need a fundamental change in that algorithm to get close to the numbers you want. This isn't a technological limitation, it's a algorithmic limitation, and you can't really put time frames on these kinds of breakthroughs.
Remember that this is done using clear full-frontal pictures, FRT drop significantly in accuracy with even the smallest change in angle. Not to mention sunglasses, (facial) hair obscuring parts of the face and different lighting conditions.
Current techniques that try to deal with such variation need several (clear) pictures from different angles to build a model of a face to be able to recognize a face.
I'd go with decades rather than years before the limitations mentioned are resolved.
Try installing Picasa and spend a little time tagging your family photos. It's a little startling how good it is. It consistently tags me regardless of whether I have a beard or my glasses in any given picture. Likewise, it quickly IDed my parents in 40 year old family photos that they scanned and sent, based on recent images. Mrs. Browl and I enjoy photography as a hobby, I'm pretty sure Google could ID either of us with 90%+ accuracy from a photo taken on the street. With Facebook you have both the computers and the crowdsourcing at work, so their tagging may be even better.
I don't have iPhoto, but I'm a little scared by how good Picasa is. I have about a prosumer level of knowledge - not enough to develop image-processing SW, but enough to enjoy reading SIGgraph papers.
