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What ever happened to people understanding "Nothing's free"?

Err, I don't recall anyone disputing that point (?). But some things are private, even when they're not free. Like telephone conversations, surface/air mail, sex (in the flesh), SMS (aka. "text-messaging"), etc...

Most users would expect IM to fall into that category.

Of course, given that IM happens on a public network, one might think that users ought to expect it to be in the same category as having a cellphone conversation in restaurant, sending a post-card, sex (in the flesh -- in a park), etc, which are also free and non-private (although the sex involves privates, and may not be free if one needs to visit the doctor, because one doesn't know what poison oak/ivy looks like).