An open source community driven project cannot possibly compete with the existing network monopoly that is Facebook in order to develop the scale and power of software and architecture needed. Never mind security. Equally users have absolutely no reason to switch to another corporate overlord when Facebook does a great job of providing a free service.
The only alternative that stands a chance is one run as a business, employing the best full time staff, investing in the same advertising, business partnerships and hardware as Facebook, but with any profits going to charities chosen by the users so they are motivated to spread the word. This means users privacy can be balanced with money raised for charity and users have an incentive to open up more if they choose to. Initial investors (Dragons Den?) could be promised a capped, say 300% ROI and a place on the board of trustees that are trusted to maximise profits for charity, not shareholders, while listening to the users.
I’m sure there are plenty of people who would do some pro-bono work to help from developers to lawyers to ego driven businessmen to celebrities. If Lady Gaga and co can go without social networking for a day in the name of one charity I’m sure they could be brought on board if they stand to help charities long term. This is one internet business where people hold the ultimate power. Somebody just needs to get it going. I’ve not got the time and skills to do it but I’d happily join and promote it if someone gets it going.
Diaspora might even make a good starting point but it will need a heck of a lot more people behind it who have good business sense but aren’t just in it for themselves.