That's interesting; it seems to me that if circles aren't actually intended to be used from a content driven perspective (eg person X is an amateur photographer and also posts about geocaching; they don't care who reads either but they don't want to spam people that are interested in only one or the other) then that is how circles would be (you 'tag' your own posts and people who follow you subscribe to just some of your tags).

I actually think that definitively shows that the intent of circles is just security (person X doesn't want his mom seeing his drinking photos) and that the possibility of sharing content based on what the reader is interested in really just comes for free with that (though in a roundabout and inconvenient way; the provider has to determine what content the reader is interested in).