If Valve weren't hellbent on trying to leverage social networks to sell games, the default for everything would be private. How many people want to notify everyone they know about their game collection, how many hours they've spent on each, whether they have their computer on and Steam client logged in at any given point in time, or what they're playing at the moment? It's not as if one's grocery store, bank, library, car dealership, stockbroker, electrical utility, video streaming service, or any other vendor has a mechanism to broadcast purchases or useage statistics, much less defaults to having it enabled.

There is a legit need for matchmaking with friends in multiplayer games, sure, but that'd be readily doable as an opt-in on a per-game basis and visible to people who have the same game.

And even for that case, I'd also wager that there are people who would prefer to have different profiles for different friends groups. Like, maybe you want to have a different public face when hanging out with a handful of real-life friends, your spouse, your six-year-old kid, and your guildmates in some video game, even if you might, at some point, want to play one game or another with any one of them.