Pretty much every feature Facebook adds has encountered this reaction. I think that on average, the subsequent usage and adoption statistics do not support your claim that users don't want increased utility.
It is true that a few things have become less private, but on the whole, the privacy of things on Facebook is easier to control, finer-grained and clearer to people.
My point is not that increased utility is bad, it's that what you consider increased utility is not what I might. Reduced privacy is a reduction in utility to me.
Now, note - I'm a FB app writer. I'm happy I can see more of this info. My own privacy settings are tighter than most, so I don't lose out there either. However, if FB wants to provide utility to users, educate them much more about the implications of each checkbox because most users still don't get why it's important.
It is true that a few things have become less private, but on the whole, the privacy of things on Facebook is easier to control, finer-grained and clearer to people.