It's a slippery slope - it certainly helps getting users to join, but it has implications on privacy and trust. That being said I think that most users will probably see it as a service and not a threat. The thing to notice here is that YC users and techies see the problems with this approach, but normal users don't. They just see the service, not the implications of it. So if you don't abuse it I think there are certainly cases where it makes sense to do.