Private life drama, baby, leave me out
Sure, many teens repeatedly tell me "public by default, private when necessary" but this doesn't suggest that privacy is declining; it suggests that publicity has value and, more importantly, that folks are very conscious about when something is private and want it to remain so. When the default is private, you have to think about making something public. When the default is public, you become very aware of privacy. And thus, I would suspect, people are more conscious of privacy now than ever. Because not everyone wants to share everything to everyone else all the time.
It may be too late to worry about "public" becoming the default; the soft-surveillance society may already have become a fait accompli. As Boyd points out, "It's in Facebook's economic interest to force people into being public, even if a few people break up with Facebook in the process." But because "public-ness has always been a privilege" many don't experience this as coercive and volunteer to participate, and continue to participate even after they discover they might be more expose than they thought because of confusing privacy settings and terms of service agreements. Also, once a person's network is built within a particular site's architecture, it becomes very hard to check out, when the reciprocal expectation is that you'll be there, ready to respond and to update in order to maintain the (now mediated) friendship with others.
Boyd writes that "The best way to maintain privacy as a public figure is to give folks the impression that everything about you is in public." This is something that has always escaped me about the use of status updates and the like. If you add enough of them, what you don't share gets more protected, more private, hidden behind the smokescreen of the ephemera we do share. The problem is that the shared self we create online then becomes something trivial itself. We find ourselves forced into a position of inventing a shallow, superficial self to guarantee the intimate self can escape exposure.