You mention privacy as a key factor -- I agree, but rationally a free social network must encourage sharing to stock its shelves with user information to provide to advertisers. In the other direction, there's App.net which can afford to enforce privacy because its income depends only on membership fees. (Unfortunately, membership fees inhibit the network effect.)
So what would make Facebook better? A better photo-sharing experience? An Events system which could interface with external apps? Or, does it go deeper? More users, I think, are recognizing that Facebook shows their friends only at their best, and are struggling to compare their lives to the glorified lives of their friends. Will the next social network open the door to deeper sharing, as opposed to more sharing? (Path comes to mind here...)