Mathew Ingram wrote an interesting piece on Gigaom entitled Privacy is Hard Because People Change Their Minds. 

From the article:

“Why is privacy so hard? Sociologist Danah Boyd, who specializes in the way people use social networks, says in the latest issue of MIT’s Technology Review magazine that it’s because “the way privacy is encoded into software doesn’t match the way we handle it in real life.””

The article talks about “civil inattention”, which is roughly the personal equivalent of “practical obscurity“.   It means that when we are having a conversation in a public place, “people will politely ignore us, and even if they listen they won’t join in, because doing so violates social norms.”

The article goes on to say:

In other words, we all view privacy differently based on the situation we’re in, the other people around us and our relationships with them, our goals and desires within that particular situation, and so on. These things combine to create a complex web of competing pressures and incentives related to whether we keep something private or not: a web so complex that it makes a mockery of the various tools that most services such as Facebook use to help you manage your privacy.

Thus one of the reasons privacy is so complex is that it combines technical, business, cultural, educational, and behavioral issues.

As another illustration of complexity – and how privacy is about personal viewpoints and choice - take a look at this NY Times article entitled Technology Aside, Most People Still Decline to Be Located.  Location based services are all the rage now - such as Foursquare, and the recent Facebook controversy.  It talks about how many people are reluctant to share where they are – even if they are willing to share other information.