Since "facebook" is already a generic term for "a reference book or electronic directory made up of individuals' photographs and names," I don't see how they can make much of a strong branding claim (though I will certainly agree that "Facebook" is a more popular usage than "facebook").
I'd be hard-pressed to think of this as anything except poor planning when choosing the name. This is not really a case of brand dilution like Xerox, Scotch Tape, or Band-Aids. Guess you should have thought of that earlier, Zuck?